Clearwire Hands Network Management to Sprint Partner Ericsson, Continuing Rapid Makeover

5/18/11Follow @curtwoodward

Wireless network provider Clearwire (NASDAQ: CLWR) continues taking significant steps to remake itself. Today, the Kirkland, WA-based company announced it is handing over day-to-day management of its fourth-generation (4G) network to Ericsson (NASDAQ: ERIC). The move means that about 700 Clearwire employees will work for Ericsson, “in locations around the United States before mid-year 2011,” the companies said in a news release. Financial terms of the seven-year partnership were not disclosed.

This looks like another sign of Sprint, Clearwire’s majority shareholder, exerting stronger influence over company direction and strategy—Ericsson has a similar management deal with Sprint (NYSE: S) dating to 2009, the press release said. Clearwire cut staff late last year as part of a restructuring plan, and announced at the end of 2010 that founder Craig McCaw was out as chairman.

In March, the company announced that another Northwest wireless pioneer, John Stanton, was taking over as interim CEO after three top officers left Clearwire. And last month, Clearwire and Sprint announced they had settled a lingering dispute over wholesale pricing in a $1 billion deal. At the time, Stanton said that deal would allow Clearwire to operate efficiently for the next two years while planning for growth.

Clearwire’s current 4G network is built around a technology called WiMax, but the company has said it is open to adopting a different kind of technology, called Long-Term Evolution or LTE, that is more widely used by other wireless companies. At the time of the Sprint wholesale deal, Stanton was quoted as saying that Clearwire would, however, need more money to expand to LTE. Clearwire’s current investors also include Google, Comcast, Time Warner Cable, and Intel

Curt Woodward is a senior editor for Xconomy based in Boston. Email: cwoodward@xconomy.com Follow @curtwoodward

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