14 DAY TRIAL // Sprint Nextel and Clearwire have recently announced that they have amended their long-term agreement for wireless wholesale services
This puts an end to a dispute that's been dragging on for several months, while leaving a dent in the revenues of Clearwire.
The main issue was the level of payment Sprint was offering Clearwire for data services of the phones that run on both 4G and 3G networks.
According to the new amendments, Sprint agrees to pay Clearwire a minimum of $1 billion during 2011 and 2012 for 4G wholesale services comprised of minimum usage commitments of $300 million in 2011, $550 million in 2012 and $175 million in pre-payments for 4G wholesale services to be used in 2011, 2012 and beyond.
“We are pleased to reach this wholesale pricing agreement with Clearwire,” said Dan Hesse, Sprint CEO. “We look forward to working with them under this new agreement to provide an expanded offering of 4G capabilities and solutions for Sprint customers.”
While Sprint, which owns the majority shares of Clearwire, will be able to offer its customers 4G services through Clearwire, it will also continue discussions with LightSquared, another player in the market that plans to build its own 4G network.
“Sprint has been our biggest and most important customer and partner since we launched 4G services in the U.S. more than two years ago,” said John Stanton, Clearwire's interim CEO.
In addition, the new agreement sets new standards for Sprint devices that operate on both Sprint's 3G network and Clearwire's 4G network.
This includes smart phones such as the HTC EVO 4G and Samsung Epic 4G, and other dual-mode devices like the newly introduced Novatel Wireless MiFi 3G/4G Mobile Hotspot 4082.
The agreement includes usage-based pricing and volume discounts, as well as minimum payments per 4G device.