According to Bloomberg, Sprint Nextel, the United States’ third-largest mobile operator in terms of subscribers, has reduced its voting stake in WiMAX operator Clearwire to less than 50%, in an effort to placate investor concerns that Clearwire may be considered a subsidiary and thus render Sprint liable for its outstanding debt. According to a regulatory filing, Sprint cut its voting interest from 53.7% to 49.8% on 1 June. Sprint Nextel spokesman Scott Sloat commented: ‘Sprint is proactively providing protection and flexibility with respect to its debt agreements and eliminating ongoing investor concerns about any potential cross-default risk’. The altered voting stake does not affect Sprint’s equity stake in Clearwire or its relationship as a customer of the carrier, Sloat added.
According to TeleGeography’s GlobalComms Database Clearwire has wholesale service agreements in place with all of its shareholders, most notably with Sprint, which allows the latter to purchase mobile broadband data services from Clearwire for resale to consumers. However, Clearwire has reportedly struggled to meet its cash needs as it builds out its WiMAX network, and in February 2011 it was reported that Clearwire was poised to abandon its contentious retail strategy, and concentrate on its wholesale operations, allowing it to conserve cash to bankroll the development of its high-speed network. In the past Sprint has openly objected to Clearwire’s retail strategy, on the basis that it is expensive to maintain, and involves the two companies directly competing with each other for retail customers.