Sprint sees Clearwire partnership continuing

Wed Mar 9, 2011 2:38pm EST

* Says involvement level depends on strategic decisions

* Says Clearwire/Sprint should share Sprint's network

* Says could offer dual LTE/WiMax handsets

* Sprint shares off 0.9 pct, Clearwire shares up 3 pct

NEW YORK, March 9 (Reuters) - Sprint Nextel (S.N) plans to continue its relationship with its Clearwire Corp CLWR.O venture into the future, but the depth of that relationship will depend on other strategy decisions Sprint makes, according to Sprint's chief executive, Dan Hesse.

Sprint, which has a 54 percent stake in Clearwire and uses its WiMax network for its own-brand high-speed services, is planning a network upgrade and looking at options such as network sharing with other operators.

As a result, investors have been concerned about what happens to Clearwire if Sprint decides to introduce LTE -- a rival technology to WiMax -- in its own network, or if Sprint does a network sharing deal with Harbinger-backed LightSquared, which is setting itself up as a rival to Clearwire.

During a webcast of an investment conference, Hesse did not directly address recent reports that Sprint is in merger talks with smaller rival T-Mobile USA, a unit of Deutsche Telekom. (DTEGn.DE)

He insisted that whatever Sprint decides, it will still use WiMax and have a relationship with Clearwire going forward but said it remains unclear whether the involvement with Clearwire would be on "a sliding scale."

"In every option we're looking at, every one includes WiMax and Clearwire," Hesse said, but he added it was still undecided "how heavily we're with Clearwire versus the other alternatives."

Clearwire shares were up 3.1 percent at $5.35 after the comments. Sprint shares were down 0.9 percent at $4.66.

Hesse also said Sprint could come to a network-sharing agreement with Clearwire, which could avail of Sprint's network if it is going to expand its current service beyond a third of the U.S. population, known as POPs in industry parlance.

"It would make a lot of sense if Clearwire were to build out additional POPs for them to look at doing it with Sprint," he said.

Sprint has promised to make an announcement about its strategy for the next generation of high-speed wireless services by mid-year as it plans to start investing in a network upgrade in the second half of 2011.

It is widely expected to announce a move to LTE technology for its own network. Hesse said such a decision could lead to the introduction of phones that support both LTE and WiMax.

The network upgrade is expected to give Sprint flexibility to support different technologies on the same network and to host other operators services in a form of network sharing.

Hesse said he hopes to have made decisions about who will share the network before the upgrade starts.

"We're going to get a better return on that investment the more we've thought through," Hesse said.

Before Sprint and Clearwire could come to any kind of network sharing agreement Hesse suggested that they would have to end a dispute they are currently having about how much Clearwire charges Sprint for access to its WiMax network.

"I would be very surprised if that wasn't resolved pretty soon. Then we'll cross other bridges when that comes," Hesse said. (Reporting by Sinead Carew, editing by Matthew Lewis)