Sprint Pushed for Deal Between Clearwire, T-Mobile

Sprint Nextel Corp. supports a network accord between partner Clearwire Corp. and Deutsche Telekom AG’s T-Mobile USA, said Goldman, Sachs & Co. analyst Jason Armstrong, who met with Sprint management yesterday.

“Sprint indicated they have encouraged a wholesale deal,” wrote Armstrong in a Dec. 1 note, after meeting with Chief Executive Officer Dan Hesse and Chief Financial Officer Bob Brust. “Sprint would support a T-Mobile equity infusion into Clearwire,” he wrote, noting it would hinge on the price.

In a wholesale deal, T-Mobile would buy capacity on Clearwire’s so-called fourth-generation network, which enables faster Web browsing and video downloads than some other standards. T-Mobile’s own network uses a different technology.

Clearwire said last month it may not have enough funding to keep operating and announced a debt sale of at least $1.1 billion today. On Nov. 4, the company said it would pare 15 percent of jobs, reduce sales and marketing spending and delay its Clear-branded smartphone to help it save as much as $400 million through the first half. Sprint has a 54 percent stake in Clearwire and sells service over the Kirkland, Washington-based carrier’s network.

Sprint continues to negotiate with Clearwire though “there was no commitment to a resolution by year-end,” said Armstrong. The carrier “does not appear to have shareholder support for a full buy-in of Clearwire, making an equity infusion most likely,” he said.

Clearwire Falls

Mike DiGioia, a Clearwire spokesman, said the carrier had previously held discussions with T-Mobile, though he declined to say if the carriers have held recent talks.

Cristi Allen, a Sprint spokeswoman in Overland Park, Kansas, and Reid Walker, a T-Mobile spokesman in Bellevue, Washington, both said they had no comments to add.

Sprint gained 9 cents, or 2.4 percent, to $3.86 at 4 p.m. in New York Stock Exchange composite trading. Clearwire fell 92 cents, or 13 percent, to $5.90 in Nasdaq Stock Market trading, its lowest since Dec. 10, 2009. Deutsche Telekom lost 4 cents to 10.02 euros in Frankfurt.

To contact the reporter on this story: Greg Bensinger in New York at gbensinger1@bloomberg.net

To contact the editor responsible for this story: Peter Elstrom at pelstrom@bloomberg.net

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