Sprint agreed to pay $2.97 per share for remaining shares of Clearwire that it does not already own. The deal, has been accepted by Clearwire’s Board of Directors, equates to a total payment of $2.2 billion for the outstanding 50% equity stake, and results in a total Clearwire enterprise value of approximately $10 billion, including net debt and spectrum lease obligations of $5.5 billion.
Sprint said itss Network Vision architecture will be able to take full advantage of Clearwire’s complementary 2.5 GHz spectrum assets, while achieving operational efficiencies and improved service for customers as the spectrum and network is migrated to LTE standards.
“Today’s transaction marks yet another significant step in Sprint’s improved competitive position and ability to offer customers better products, more choices and better services. Sprint is uniquely positioned to maximize the value of Clearwire’s spectrum and efficiently deploy it to increase Sprint’s network capacity. We believe this transaction, particularly when leveraged with our SoftBank relationship, is further validation of our strategy and allows Sprint to control its network destiny, stated Sprint CEO Dan Hesse.
- Clearwire holds the largest spectrum portfolio in the U.S. but in upper bands. Its spectrum is an average 163 MHz in the top 100 U.S. markets.
- Clearwire operates a nationwide WiMAX network and has been planning to make the transition to TD-LTE. Its main wholesale customer and investor is Sprint, which has extended its 4G agreement through 2015. The companies have outlined ways of bridging their FD-LTE and TD-LTE networks with dual-mode devices that are under development.
- Also in October, SoftBank announced plans to invest $20.1 billion to acquire a 70% in Sprint. The deal consists of $12.1 billion to be distributed to Sprint stockholders and $8.0 billion of new capital to strengthen Sprint’s balance sheet. The investment aims to accelerate Sprint’s next generation network and its competitive position as the No. 3 U.S. mobile operator. For Softbank, this represents a major leap beyond its home market of Japan, where it is the No. 3 mobile operator and No. 2 wireline broadband provider. The companies hope to get the deal done by mid-2013, pending regulatory approvals.
- As of October 25th, Sprint’s Network Vision program had over 4,300 cell sites on air and the number either ready for construction or currently being updated had more than doubled in the last three months to more than 13,500. Sprint had completed leasing and zoning permits on more than 20,000 sites. Weekly construction starts were up over 250 percent from the second quarter but the company expects to bring 12,000 sites on air approximately one quarter later than originally planned.
CAPEX reached $1.5 billion in the quarter, compared to $760 million in the third quarter of 2011 and $1.2 billion in the second quarter of 2012.
As of the end of Q3, Sprint had LTE available in 32 cities and expects to add 115 additional cities in the coming months.