Sprint gains control over Clearwire with stock buy

Updated. Sprint(s s) has upped in investment in Clearwire(s clwr) to give it the majority stake it needs to take direct control of the struggling 4G carrier. In a filing with the Securities and Exchange Commission on Thursday, Sprint revealed it has bought the outstanding shares of Eagle River Holdings, the investment arm of Clearwire’s original founder Craig McCaw.

With a majority stake in Clearwire, Sprint is now running the show – a role it’s never been willing to assume despite its plurality stake in the company. But with Softbank’s takeover of Sprint looming, Sprint now seems ready to consolidate its U.S. assets, in particular the more than 100 MHz of 2.5 GHz spectrum that Clearwire controls.

As I pointed out Wednesday, Sprint has kept Clearwire at arm’s length ever since it merged its WiMAX operations with the company in 2008. Sprint has stepped in at critical junctures to keep Clearwire afloat, but it’s also been content to leave Clearwire’s half-built 4G network in limbo. Sprint has even pursued its own LTE strategy, relegating Clearwire’s WiMAX service to its prepaid customers.

But with Softbank deal, that may all change. Softbank and Clearwire have a future technology path in common. They’re both building a variant of LTE called time-division or TD-LTE and are working together along with other international operators to build a device ecosystem around the technology. While many analysts predicted that Sprint and Softbank would buy out Clearwire entirely, purchasing a few million shares is a far easier and far cheaper way of ensure they have access to that spectrum in the future.

Still, if the new Softbank-Sprint wants to take advantage of the treasure trove of airwaves, they’ll have to shell out a lot more money. Clearwire is building an LTE network today, but its scope is pretty limited. It’s deploying LTE capacity “hot zones” in its current WiMAX footprint, not a uniform, nationwide network.

Sprint hasn’t yet made any public statements on the deal, but surprisingly AT&T(s t) has. On Wednesday AT&T vice president Brad Burns issued a statement that points out the Softbank-Sprint-Clearwire deal would give a foreign company control of the country’s single largest collection of wireless spectrum. Yet, at the same time, Burns wasn’t condemning the deal. Here’s the full text:

“Softbank’s acquisition of Sprint and the control it gains over Clearwire will give one of Japan’s largest wireless companies control of significantly more U.S. wireless spectrum than any other company. We expect that fact and others will be fully explored in the regulatory review process. This is one more example of a very dynamic and competitive U.S. wireless marketplace, which is an important fact for U.S. regulators to recognize.”
AT&T’s angle here could be rather subtle. It has several spectrum transaction pending before regulators and has made secret of its plans to pursue more spectrum in the future, but AT&T’s critics have tried to block those deals, claiming that the carrier is merely trying to hoard airwaves. So this could be AT&T’s logic: if regulators let Softbank, Sprint and Clearwire tie the knot, then they have no grounds to interfere with AT&T’s expansion plans.

Update: Sprint got back to us with a few details on the transaction. The deal isn’t final for another 30 days, but the end result will be the same: Sprint will own a majority stake in Clearwire. According to Sprint spokesman Scott Sloat, Eagle River is offering up its shares to existing investors, which include Intel(s intc), Comcast(s cmsca) and Bright House Networks as well as Sprint.

Sprint has agreed to buy 100 percent of the shares for $100 million, but the other investors can still exercise their rights to purchase shares in proportion to their current ownership stakes. But even if all three were to exercise those rights, Sprint’s portion of the purchase would put it well over the 50 percent mark. It’s also rather doubtful that any of those companies would be interested in the deal. The cable operators are looking to Verizon(s vz)(s vod) for their future 4G needs. Intel still has ambitions in 4G but it seems to have lost interest in Clearwire and has been trying to shed its investment.

Photo courtesy of Flickr user [401(K) 2012].