Sprint declines Clearwire convertible offer

NEW YORK, USA: Sprint Nextel let a Jan. 2 deadline pass without exercising its right to buy $760 million of Clearwire Corp convertible debt, ruling out that source of funding for Clearwire.

Sprint, which owns about 54 per cent of Clearwire and uses its network to offer high-speed services, confirmed on Monday that it had opted to not exercise the right but Sprint spokeswoman Cristi Allen declined further comment.

Clearwire needs to raise billions of dollars in funding in order to complete a high-speed wireless network it is building to compete with much bigger rivals such as Verizon Wireless, a venture of Verizon Communications and Vodafone Group Plc.

Clearwire has said that other options for new funding could come from the sale of up to $2 billion of wireless spectrum or from an equity investment from a company such as Sprint or T-Mobile USA, a unit of Deutsche Telekom.

It previously said it aimed to be able to announce new funding around the end of 2010.

Relations between Sprint and Clearwire have deteriorated in the last year over disagreements about Clearwire's pursuit of a direct retail strategy and the wholesale rates it charges Sprint.

But Clearwire said in an emailed statement that it had been expecting the Sprint decision to decline the convertible and that it still maintained a productive relationship with Sprint.

It said it is still pursuing other options such as an asset sale or an equity investment but gave no details.