Another Gain for Clearwire?

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Sprint Nextel (NYSE: S  ) wasn't the only wireless carrier signing a deal to use LightSquared's proposed 4G LTE network only to have those hopes dashed by LightSquared's failure to get that network approved. Leap Wireless International (Nasdaq: LEAP  ) , operator of the Cricket brand wireless carrier, signed a deal last March for LightSquared to supply roaming LTE coverage to Leap's own planned LTE network.

Since LightSquared hasn't been able to prove to the Federal Communications Commission that its hybrid satellite and earth station LTE network does not interfere with GPS signals, its deal with Sprint is now on life support. That plug is likely to be pulled at the end of the month, which will give Clearwire (Nasdaq: CLWR  ) an opening to become Sprint's major LTE provider.

Leap, which announced last month that it had begun a test deployment of its LTE network in Tucson, Ariz., will probably also be left without LightSquared's services. This could -- emphasis on "could," because this is pure speculation -- be another opportunity for Clearwire to pick up another LTE client.

According to a report from Fierce Wireless editor Mike Dano, Leap CEO Doug Hutcheson was asked recetly at the Citi Entertainment, Media, and Telecommunications Conference whether his company would consider getting into a wholesale LTE agreement with another company. He did not mention the Leap/Lightsquared agreement but did say that "to the degree that we can see attractive pricing on a wholesale basis ... that is something that the business been open to."

Clearwire's CFO, Hope Cochran, was at the same conference and said, "We have a tremendous amount of capacity and we would love to have another customer to be able to utilize that capacity."

So we have two companies here that could benefit mutually from a wholesaling agreement. There would be complications, though. They use different LTE technologies: Leap uses what's known as an FDD-LTE network that uses the 700 MHz frequency range, and Clearwire uses TDD-LTE in the 2.5 GHZ frequency range. That would probably mean Leap would have to forgo its current buildout and switch technologies.

Of course, I'm playing the matchmaking yenta here, but such a lovely couple they could make. Discuss.

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Editor's note: A previous version of this article failed to credit a key source. The Fool regrets the oversight.

Fool contributor Dan Radovsky has no financial interest in the above-mentioned companies. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Read/Post Comments (5) | Recommend This Article (4)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On January 09, 2012, at 9:58 PM, MattC69 wrote:

    WOW, someone call the police... You guys just totally ripped this off from Fiercewireless...

  • Report this Comment On January 10, 2012, at 12:07 AM, BuyEnergy wrote:

    Yep this is totally a ripoff of Mike Dano's article on FierceWireless including the inaccurate statement about Leap using 700MHz spectrum of which they have almost none. Whoops!

  • Report this Comment On January 10, 2012, at 12:14 AM, zanajohn1 wrote:

    There will be no gains for CLWR until they separate, somehow, from S.

  • Report this Comment On January 10, 2012, at 11:29 AM, mrrickyg123 wrote:


    Did you go to college? I can't figure out how anybody with an education would think that using somebody else's idea and not crediting it is not plagiarism in the class sense of the word. "I did get the idea and much of the information from Mike Dano's FierceWireless piece, and I should have at least credited him directly for such use." That statement is a direct admission of plagiarism in the class sense of the word (well at least for any university definition -- I don't really know, maybe your high school remedial history and English teacher didn't hold you to that standard).

    Not only is it unreal that you think it's not plagiarism (and unreal that Motley Fool accepts this), it's also an illustration of why it's often a bad idea for smart people to plagiarize-- they take incorrect information and make it even more incorrect. While TDD and FDD LTE are different standards, the difference is far greater in the cell site equipment and how the cell site can manage uplinks and downlinks (FDD is fixed, whereas TDD is dynamic and can adjust based on network requirements). This difference is not expected to affect handsets and dongles much, because all of the newest chipsets support BOTH FDD and TDE on the same chipset (and many of the new ones even support WiMAX as well for the triple play).

  • Report this Comment On January 17, 2012, at 4:48 PM, XMFDRadovsky wrote:

    Much of the information in this article came from Mike Dano's FierceWireless piece, and was not properly attributed. That has been rectified.

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