Sprint 4G/Clearwire – Update
To Business Solutions Partners
November 4, 2010
Clearwire described the financial status of its ongoing operations during its
quarterly earnings call today. During the call, the company referred to current
funding gaps, which your customers may have questions about or concerns. It's
important that you know the facts and can clearly address questions on this
subject. Below is a list of FAQs that will give you the information you need.
Q: Today, Clearwire discussed its financial status; can you elaborate on how
Sprint is involved with this given that it owns a majority of Clearwire shares?
A: Sprint’s CEO, Dan Hesse recently stated that Sprint has been in discussions
with Clearwire regarding the financial status of its ongoing operations as well
as Sprint potentially providing new financing. We expect those discussions to
continue as we review alternatives with Clearwire. There is no assurance that
the discussions will result in any transaction with Clearwire. Sprint is
providing no additional comments on this matter at this time.
It is critical to emphasize that our 4G plans remain unchanged:
* Sprint has demonstrated unparalleled leadership in 4G. This dates back
to our technology selection in 2006 and includes over two years’ experience
running a 4G network which now covers 80 million people in over 60 markets. We
will continue to demonstrate network leadership and innovation in 4G in the
years to come.
* This leadership has resulted in increased market share, especially in
iconic devices like the EVO and Epic 4G. Sprint currently offers a dozen 4G
devices and is on its third generation of several 4G devices before the
competition’s launch of a single device.
* While our leadership will resolve these matters, Sprint’s sales teams
and retail associates will remain focused on leveraging 4G to enrich the lives
of our customers and deliver solutions that save businesses time and money.
Reactive messaging – Sprint 4G Network & Devices (Customer impact)
Q: What does Clearwire’s news today mean to the future of Sprint 4G and the
network build for 2011?
A: Clearwire has indicated that it is actively pursuing various initiatives to
raise additional capital, including discussions with a number of major
shareholders and other third parties about a number of options, including
potential strategic transactions, additional debt or equity financings and/or
asset sales.
Q: Will the Clearwire/WiMAX network be shutting down?
A: No, in fact we are currently in 61 markets with plans to launch San
Francisco, Miami and Washington D.C. later this year. There are no plans to
discontinue 4G/WiMAX service in any of our launched markets.
Q: What does this mean for my current 4G/WiMAX devices?
A: The 4G/WiMAX devices that are in the marketplace will continue to offer
great service for customers using those devices and will see no change in
service or support as a result of Clearwire’s announcements.
Q: What does Clearwire’s potential spectrum sale mean for Sprint 4G?
A: Sprint cannot comment on any potential Clearwire transaction. Even if
Clearwire were to auction 40 MHz of its spectrum, the current Sprint 4G
offering would not be impacted, and Clearwire’s 4G spectrum holding would still
be twice that of its nearest competitor.
______________________________________________________________________________________________________________________
Related Sprint/Clearwire messaging:
Q. How can Sprint remain committed to Clearwire as its 4G partner when three of
Sprint’s executives recently resigned from the Clearwire Board of Directors?
Key Elements for Answer/Response
* Sprint is exercising caution and good corporate governance by stepping
off the Clearwire board
* Sprint retains majority ownership of Clearwire along with seven of the
13 board seats
* Sprint remains committed to WiMAX through its relationship with
Clearwire
A. The resignation of Sprint executives from the Clearwire Board of Directors
was the result of a recent clarification of a federal antitrust law by the
Supreme Court. Through the exercise of prudence and an abundance of caution and
good corporate governance, Sprint has concluded that it could be viewed as an
independent company that competes with Clearwire, and as a result, has decided
that Sprint will no longer have officers or employees serving on the Clearwire
Board. Sprint is still permitted to nominate replacements for these vacancies.
Sprint did not give up its seats on the Clearwire Board.
This action does not change Sprint’s commitment to 4G through its relationship
with Clearwire. Sprint believes it will continue to gain efficiencies with
respect to its investment in Clearwire through its contractual relationship, as
well as through its position as its largest customer and shareholder. It is
also important to note that Clearwire's board structure allows for 13 members,
seven of which Sprint still has the right to appoint.
Sprint Internal Use Only - Confidential | Sprint Proprietary Information
© 2010 Sprint. All rights reserved.
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