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Sprint sues AT&T: Hints equal iPhone 5 plus Clearwire competition

Yesterday we brought you the news that Sprint sues AT&T concerning the proposed takeover of T-Mobile. There has been lots of speculation that the carrier would finally be getting the next iPhone when it is released, but these hints equal iPhone 5 and could mean Clearwire competition.

Cnet are reporting that Morgan Stanley is suggesting it is not a good time to be a Clearwire investor. The provider of 4G wireless has a few problems on the horizon according to the investment firm. They need to source further funding and are quickly losing its lead in the 4G race, and also have the threat of Sprint landing the iPhone.

If Sprint get the iPhone 5 it would run on a competing network, which in turn will have an effect on sales of other smartphones on Sprint that is Clearwire’s biggest source of wholesale customers. These problems lead Morgan Stanley to believe that the company’s share value is $1 or even less, which is a lot lower than its current stock price of $3.10.

Simon Flannery of Morgan Stanley said that “Limited visibility into market expansion and unproven ability to disrupt existing technology make Clearwire a risky investment”. But Clearwire have hit back and said it has a strong spectrum position and upgrade plan.

Only last month Clearwire announced it will move from WiMax 4G technology to what AT&T and Verizon use, LTE. There has been more investment in this technology that also has the ability to offer a faster wireless connection.

Clearwire needs funding to make this move though, and have stated it needs $600 million to make the necessary upgrades to its network. Clearwire have been overtaken by Verizon with its 4G LTE network, and AT&T has five LTE markets coming online in the coming weeks. The carrier has also just begun selling the LTE compatible HTC Jetstream tablet PC.

Presently Sprint is the biggest customer and investor of Clearwire, but having the iPhone it may become a source of competition. It will divert focus away from its lineup of 4G WiMax smartphones that are a source of revenue for Clearwire. The device would probably use Sprints 3G CDMA network and not on WiMax.

If Clearwire manages to get some new investment its stock price could rise, and Flannery said Sprint could snap up the rest of the company. It is thought though that Sprint is reluctant to take on Clearwire’s debt and cash black hole on to its books.

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Written by Gary Johnson

Gary has a background in engineering and passion for motorcycles, gadgets, and home cinema. In his early years, his obsession for Hi-Fi technology would see him creating the perfect setup with a good ear for sound quality. While Gary is keen to write about most topics that PR covers, his love for phones finds him reporting a lot of news about applications for iPhone, Android, and other popular operating systems



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