Sprint (S) May Be Nearing Clearwire (CLWR) Buyout

August 19, 2011 7:01 AM EDT
Sprint (NYSE: S) is trading slightly higher early Friday, following reports it may seek a buyout of partner Clearwire (Nasdaq: CLWR) through outside investment in its own company.

Sprint may be in investment talks about investment with cable providers like Comcast Corp. (Nasdaq: CMCSA) and Cablevision (NYSE: CVC), among others. Bloomberg reports that under one scenario, Sprint would use the money to buy equity in Clearwire is doesn't already own.

Along with other investors like Time Warner Cable (NYSE: TWC), and Bright House Networks, Sprint and Comcast are looking for ways to buyout the company in order to complete the build out of their high-speed wireless network. Clearwire has been losing money over the last several quarters (15, to be exact), and a buyout would allow Sprint and the cable companies a better opportunity to focus Clearwire's direction to speed up the build out process.

Clearwire plans to spend about $600 million in order to upgrade it's long-term evolution (LTE) network to compete more wholly against companies like AT&T (NYSE: T) and Verizon (NYSE: VZ).

The investment by cable companies in Sprint would also aid them in being able to compete more wholly with AT&T and Verizon in offering high-speed Internet to customers.

Sprint may also be looking to speed up the build out as it seeks to gain a better marketing position as AT&T and T-Mobile merger talks continue. Antitrust issues still linger in the potential acquisition, and Sprint may be looking to position itself better should the deal go through to avoid a potential buyout.

Shares of Sprint are trading 0.3 percent better Friday.

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