It was down to the wire whether Clearwire would pay the interest due on outstanding debt today — the company had previously said that it was considering its options for going into default, but all is well this morning on news that the network operator is getting a fresh infusion of cash and commitments from majority owner Sprint that help it pay off the $237 million due today.
What exactly is Sprint offering? As part of its transition to LTE, Sprint ultimately plans to phase out WiMAX service in the long haul — and until today, the carrier had no plan in place to keep WiMAX going beyond 2012. That changes here with a new deal valued at $926 million — most of which will be paid in 2012 — that gives Sprint access to Clearwire's WiMAX network through 2012 and 2013, with additional provisions in place that would ultimately have Sprint using it through at least 2015. The other half of the equation is LTE. Sprint had said that it was mulling funding Clearwire's move to LTE, and it has now agreed to pay "up to $350 million" to help do exactly that provided that Clearwire meets certain unspecified build-out targets by mid-2013. In exchange, Sprint will have access to the service under some usage-based pricing terms that have been laid out in the contract, and the expectation is that it'll be launching Clearwire TD-LTE compatible devices in 2013.
Of course, Sprint already had an LTE roll-out plan in place through a combination of its own work and a recently-announced collaboration with LightSquared, so this becomes quite a balancing act of mixed bands, technologies, and companies, all with slightly different strategies and endgames. The bottom line? Your Sprint WiMAX-equipped phone or modem is safe from obsolescence for the foreseeable future.