Sprint Nextel may have found its financial savior in Softbank of Japan, thanks to a $21.3 billion deal that will provide ballast to the struggling cellphone service provider.
But what of Clearwire, the equally troubled wireless network operator that works closely with Sprint?
So far, it appears that Clearwire investors think Monday's deal bodes well for the future of their company. Shares of the network operator were still up 15.5 percent in midafternoon trading, at $2.68. And several classes of bonds gained anywhere between 2 and 6 percentage points in value, according to Standard & Poor's Leveraged Commentary and Data service.
All that's despite this very explicit passage in the press release announcing Softbank's pact with Sprint:
The transaction does not require Sprint to take any actions involving Clearwire Corporation other than those set forth in agreements Sprint has previously entered into with Clearwire and certain of its sha reholders.
That hasn't dampened speculation that Sprint will eventually seek to take over its partner. It currently owns 48 percent of Clearwire's shares - but has a far smaller representation on the network operator's board. To many analysts, the situation doesn't seem tenable in the long run.
To build out its Long Term Evolution data network, Sprint needs wireless spectrum, something that Clearwire has in spades. The two already have an agreement in which Sprint resells its partner's service in certain markets across the United States. And it pledged to provide up to $1.6 billion over the next four years to help Clearwire upgrade its network.
But more ambitious expansion plans, along the lines of what Softbank's chief, Masayoshi Son, appears to be contemplating, would require greater control over Clearwire.
Sprint has in fact been talking with Clearwire about a number of possibilities, people briefed on the matter have told DealBook. Th at doesn't mean that any deal is near completion.
“Having a partner like this can't be a negative,†one of these people told DealBook. “But there's no particular urgency†in getting a takeover done.
