After years of a love-me-love-me-not relationship, the deal between the carrier and the network provider gives some hope that the merging of these two companies can finally make Sprint a viable challenger to the nation's two largest mobile carriers, Verizon (NYSE: VZ ) and AT&T (NYSE: T ) .
Even the ratings agencies are looking -- or considering looking -- upon Sprint-Clearwire with approval. Fitch has given the merger a Rating Watch Positive mainly on the strength of spectrum gains Sprint would obtain.
Moody's Investors Service is also considering upgrading Clearwire's debt ratings on the strength of of Sprint's buyout.
The deal would not only give Sprint complete control of Clearwire's spectrum, but, according to Recon Analytics founder Roger Entner, writing in Fierce Wireless, it would make Sprint "the largest spectrum holder in the United States" with 200 MHz out of the 547 MHz of useable wireless spectrum in the U.S. Sprint would have a potentially clear speed and capacity advantage over its competitors.
Of course, the above scenario would be dependent on the FCC approving all of that spectrum being controlled by a single entity.
None of these positive outcomes for Sprint would have come about but for Japanese mobile operator SoftBank stepping forward with its offer to buy 70% of Sprint for $20 billion, with $8 billion coming up front. Cash-starved Sprint suddenly found itself with enough money to do the one thing that seems to make the most sense for it and its shareholders.
Speaking of shareholders, even though, according to Clearwire's recent filing with the SEC, the merger agreement has been unanimously approved by both Clearwire's and Sprint's board of directors, it still needs to be signed off on by the companies' investor masses.
If the Sprint-Clearwire deal does fail to be completed, that filing also states that Clearwire may be entitled to a termination fee of $120 million and $100 million in prepayment for LTE services rendered to Sprint.
Both deals are expected to be completed by mid-2013, pending FCC approval. It seems unlikely that either the Sprint-SoftBank or the Sprint-Clearwire pairings will have as hard a time getting regulator approval as the failed AT&T-T-Mobile USA merger of last year.
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