Companies have been making a lot of rash decisions lately. For instance T-Mobile, a GSM carrier, was MetroPCS, a CDMA carrier. Sprint has been in a flurry of business deals over the last week. One of them has been obtaining controlling share of WiMax producer Clearwire.
Let’s start at the beginning shall we? Just a few days ago, Japanese company Softbank purchased Sprint for $20.1 billion. Given the groundwork of the deal, no one thought Sprint would buy out Clearwire. Apparently, we were all wrong because that’s exactly what Sprint did today.
In a surprising and aggressive move, Sprint bought out the shares of Eagle River Holdings to gain 50.8% control of the shares. With the purchase, it gives Sprint control of Clearwire. Since Softbank owns Sprint, that gives Softbank control as well. You can check out the SEC filing here.
Why is Sprint buying up WiMax?
That is the million dollar question. Sprint has spent most of 2012 trying to get away from WiMax. Currently, Sprint is in the middle of building its LTE network. With 100 new LTE sites announced last month and 22 cities announced this month, Sprint has been definitely getting more aggressive in their LTE plans.
The popular speculation is that the acquisition allows Sprint to continue using WiMax. Even though LTE is rolling out, there are many customers still with WiMax phones who would be pretty mad if their 4G suddenly went belly up. Until LTE is a nationwide service, WiMax is the only Sprint 4G that most customers have.
Of course, there is the bigger picture. According to The Next Web, Softbank is trying to get its own high speed wireless network in Japan. It is likely that they’ll be tapping Clearwire and WiMax more for their needs rather than Sprint’s.
One thing is for certain, WiMax is not a technology that will be around for much longer. When Sprint’s LTE network is finished, WiMax will likely be shut off. That’ll bring an end to its presence in North America. Was it a smart move for Sprint to get controlling share of Clearwire? Let us know your thoughts.