Sprint Nextel executives have stepped down from their posts as Clearwire board members, Clearwire said Thursday. The move could clear the way for other investors in Clearwire, which is currently building a nationwide 4G wireless network.
Clearwire said today that Sprint CEO Dan Hesse and two other top Sprint executives--Keith Cowan and Steven Elfman--have resigned from Clearwire's board of directors. The company will name temporary members to the board. There are four Clearwire board members Sprint previously appointed who are remaining on the board.
Clearwire is a joint venture among several big companies. Sprint is the largest stakeholder owning 54 percent of the company. The rest of the company is owned by several investors, including cable operators Comcast, Time Warner Cable, and Bright House Networks, as well as tech giants Intel and Google.
Clearwire is currently in 52 markets across the U.S., and it continues to build its network in more cities. Sprint and its cable partners resell Clearwire's 4G service. But Sprint, in particular, has made the 4G network and the faster speeds it offers a cornerstone of its marketing strategy. The company recently launched two new smartphones that use the 4G network and offer back-up service on Sprint's 3G network for coverage where 4G is not available.
Building out a new network doesn't come cheap. And Clearwire is in need of more funding. Almost a year ago, the company raised about $2.8 billion in debt and equity to help fund its network build. But the company still needs more cash.
One possible partner is T-Mobile USA, a subsidiary of German phone company Deutsche Telekom. Earlier this year Robert Dotson, T-Mobile USA's CEO, said the wireless carrier was looking to create a joint venture with Clearwire. Clearwire's CEO Bill Morrow has also previously confirmed the companies have been in talks.
T-Mobile is the fourth-largest major wireless operator in the U.S. The company is currently deploying enhanced 3G technology called HSPA+ in an effort to compete against AT&T, Verizon Wireless, and Sprint Nextel. A deal with Clearwire could help the company augment its current coverage and add 4G services to its offering.
The departure of Sprint execs from Clearwire's board could help pave the way for T-Mobile or another investor to pour additional capital into the company.
Clearwire isn't commenting on the speculation. Instead, the company said the board resignations address recent changes in antitrust laws.
"Clearwire was informed by Sprint that the decisions to resign were made out of an abundance of caution to address questions raised by Clearwire regarding new developments in antitrust law," the company said in a statement. Clearwire's board structure allows for 13 members, seven of which Sprint has the right to appoint. The remaining four Sprint appointees to the Clearwire board are unchanged, and Sprint reserved the right to appoint new members to the Clearwire board at a later date."