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The buying makes sense. Not only does Clearwire trade for a severe discount to the market value of its principal asset (i.e., wireless spectrum), but the New Ma Bell's proposed $39 billion purchase of T-Mobile USA from Deutsche Telekom gives Sprint a powerful new reason to settle its pricing dispute with Clearwire.
These companies need each other. Acquiring T-Mobile gives AT&T ample new spectrum to expand its GSM network for both voice and data services. From there, it's a race to upgrade the infrastructure from T-Mobile's HSPA-based 3G-plus service to 4G service based on LTE. It'll be a while before either company reaches the finish line.
Call it cold comfort for Sprint, which can't afford to sit idly as AT&T and Verizon (NYSE: VZ ) deploy massive 4G networks to serve the hundreds of millions of Americans who want to see President Obama make good on promises to expand the Broadband Web to the far corners of America.
Sprint would say it has options when it comes to playing a role in the president's plan. For example, the company is in talks with LightSquared, a terrestrial and satellite-based LTE network operator that expects to be fully deployed by 2015.
That no longer makes sense. Sprint Nextel needs a partner that is nearing full 4G deployment; that way, it can bludgeon rivals as "slow" and "old" while positioning itself as the most modern choice. LightSquared could fit the bill someday, but with operations already up and running in dozens of U.S. cities, Clearwire is the best choice right now.
Do you agree? Disagree? Let us know what you think about the AT&T and T-Mobile merger, Sprint's survival strategy, and the rise of 4G wireless networks using the comments box below.
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