Sprint - Nextel 2014 Annual Report Download - page 192

Table of Contents
Index to Consolidated Financial Statements
CLEARWIRE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS —(CONTINUED)
F-109
As part of the 4G MVNO Agreement, we also agreed to usage based pricing for WiMAX services after 2013
and for LTE service beginning in 2012. We also agreed that Sprint may re-wholesale wireless broadband services,
subject to certain conditions and we agreed to operate our WiMAX network through calendar year 2015.
For the 190 days ended July 9, 2013 and the years ended December 31, 2012 and 2011, we received $231.2
million, $537.3 million and $434.3 million, respectively, from Sprint for 4G broadband wireless services. During
the 190 days ended July 9, 2013 and the years ended December 31, 2012 and 2011, wholesale revenue recorded
attributable to Sprint comprised approximately 36% of total revenues and substantially all of our wholesale
revenues.
3G MVNO Agreement — We entered into a non-exclusive 3G MVNO agreement with Sprint Spectrum,
which we refer to as the 3G MVNO Agreement, whereby Sprint agrees to sell its code division multiple access and
mobile voice and data communications service for the purpose of resale to our retail customers. The data
communications service includes Sprint’s existing core network services, other network elements and information
that enable a third party to provide services over the network, or core network enablers, and subject to certain
limitations and exceptions, new core network services, core network enablers and certain customized services. For
the 190 days ended July 9, 2013 and for the years ended December 31, 2012 and 2011, we paid $1.0 million, $4.4
million, and $17.8 million, respectively, to Sprint for 3G wireless services provided by Sprint to us.
Sprint Master Site Agreement — In November 2008, 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 date the agreement was
signed. 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 190 days ended July 9, 2013 and the years ended
December 31, 2012 and 2011, we made rent payments under this agreement of $35.5 million, $59.6 million, and
$55.8 million , respectively.
Master Agreement for Network Services — In November 2008, 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 we 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 that contain commitments that extend up to five years.
Ericsson, Inc. — Ericsson, provides network deployment services to us, including site acquisition and
construction management services. In addition, during the second quarter of 2011, we entered into a managed
services agreement with Ericsson to operate, maintain and support our network. Dr. Hossein Eslambolchi, who was
a member of our Board of Directors prior to the Sprint Acquistion, 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 190 days ended July 9,