Sprint - Nextel 2010 Annual Report Download - page 137

our board of directors, had a consulting agreement with Ericsson. As part of his consulting agreement, Dr. Eslambolchi
received payments for his services from Ericsson. He has not received any compensation directly from us related to his
relationship with Ericsson. For the year ended December 31, 2010, we capitalized $8.9 million in costs paid to Ericsson to
Network and Base Station Equipment, of which $1.8 million was included in Accounts payable and other current liabilities.
Master Site Agreement — We entered into a master site agreement with Sprint, which we refer to as the Master Site
Agreement, pursuant to which Sprint and we established the contractual framework and procedures for the leasing of tower and
antenna collocation sites to each other. Leases for specific sites will be negotiated by Sprint and us on request by the lessee. The
leased premises may be used by the lessee for any activity in connection with the provision of wireless communications
services, including attachment of antennas to the towers at the sites. The term of the Master Site Agreement is ten years from
the Closing. The term of each lease for each specific site will be five years, but the lessee has the right to extend the term for up
to an additional 20 years. The monthly fee will increase 3% per year. The lessee is also responsible for the utility costs and for
certain additional fees. During the years ended December 31, 2010, 2009 and 2008, we recorded rent expense of $52.7 million,
$28.2 million and $2.8 million, respectively.
Master Agreement for Network Services — We entered into a master agreement for network services, which we refer to
as the Master Agreement for Network Services, with various Sprint affiliated entities, which we refer to as the Sprint Entities,
pursuant to which the Sprint Entities and we established the contractual framework and procedures for us to purchase network
services from Sprint Entities. We may order various services from the Sprint Entities, including IP network transport services,
data center co-location, toll-free services and access to the following business platforms: voicemail, instant messaging services,
location-based systems and media server services. The Sprint Entities will provide a service level agreement that is consistent
with the service levels provided to similarly situated subscribers. Pricing is specified in separate product attachments for each
type of service; in general, the pricing is based on the mid-point between fair market value of the service and the Sprint
Entities’ fully allocated cost for providing the service. The term of the Master Agreement for Network Services is five years,
but the lessee will have the right to extend the term for an additional five years. Additionally, in accordance with the Master
Agreement for Network Services with the Sprint Entities, we assumed certain agreements for backhaul services with certain of
the Investors that contain commitments that extend up to five years.
IT Master Services Agreement — We entered into an IT master services agreement with the Sprint Entities, which we
refer to as the IT Master Services Agreement, pursuant to which the Sprint Entities and we established the contractual
framework and procedures for us to purchase IT application services from the Sprint Entities. We may order various IT
application services from the Sprint Entities, including human resources applications, supply chain and finance applications,
device management services, data warehouse services, credit/address check, IT help desk services, repair services applications,
customer trouble management, coverage map applications, network operations support applications, and other services. The
specific services requested by us will be identified in Statements of Work to be completed by the Sprint Entities and us. The
Sprint Entities will provide service levels consistent with the service levels the Sprint Entities provide to their affiliates for the
same services. Pricing will be specified in each separate Statement of Work for each type of service. The term of the IT Master
Services Agreement is five years, but we have the right to extend the term for an additional five years.
4G MVNO Agreement — We entered into a non-exclusive 4G MVNO agreement at the Closing with Comcast MVNO II,
LLC, TWC Wireless, LLC, BHN Spectrum Investments, LLC and Sprint Spectrum L.P., which we refer to as the 4G MVNO
Agreement. We sell wireless broadband services to the other parties to the 4G MVNO Agreement for the purposes of the
purchasers marketing and reselling our wireless broadband services to their respective end user subscribers. The wireless
broadband services to be provided under the 4G MVNO Agreement include standard network services, and, at the request of
any of the parties, certain non-standard network services. We sell these services at prices defined in the 4G MVNO Agreement.
We have been engaged in ongoing
Table of Contents CLEARWIRE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS —(CONTINUED)
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