SAN FRANCISCO (AP) — Shares of Clearwire Corp. jumped 19 percent Wednesday after Sprint Nextel Corp.’s CEO said the companies are talking about how to make Sprint’s phones work with Clearwire’s planned new wireless data network.
THE SPARK: Early Wednesday, Sprint CEO Dan Hesse said the companies have begun discussions about such compatibility with Clearwire’s upcoming LTE, or long-term evolution, network, and their discussions on commercial arrangements are ongoing.
Sprint owns 54 percent of wireless broadband company Clearwire and uses its existing data network for its “Sprint 4G” service. It doesn’t control Clearwire’s board, though, and the companies’ management teams have had a cool relationship.
Earlier this month, Sprint said it would stop selling phones compatible with Clearwire’s current data network at the end of next year, with no mention of plans to use the planned “LTE” or “Long-Term Evolution” network. That sent Clearwire shares into a dive.
THE ANALYSIS: Pacific Crest Securities analyst Steve Clement said it’s still hard to say what the discussions mean for Clearwire, but it could pave the way for a commercial agreement under which Sprint uses Clearwire for a longer period of time than the wireless carrier seemed to indicate earlier in the month.
Clement, who rates Clearwire shares “Sector Perform,” said it seems to indicate a positive tone change for Sprint.
SHARE ACTION: Clearwire shares rose 32 cents, or 19.2 percent, to $1.96.