Sprint Nextel Corp. (NYSE:S- message board) has exercised its right to drop out of a wireless spectrum bidding consortium that's headed up by four major cable MSOs: Comcast Corp. (Nasdaq: CMCSA, CMCSK), Time Warner Cable Inc. (NYSE: TWC - message board), Cox Communications Inc. , and Bright House Networks .
News of Sprint'swithdrawal was buried in a 10-Q Time Warner Cable filed with the Securities and Exchange Commission (SEC) Wednesday in concert with the operator's second quarter financial results. (See TWC Ups Q2 Revenues.)
The operator said Sprint notified other members of the SpectrumCo consortium of its intention to withdraw during the second quarter. As a result, Time Warner Cable said it will contribute roughly $30 million to the venture in the third quarter to fund its share of the payment to Sprint.
Last October, SpectrumCo was deemed the winner of 137 wireless spectrum licenses for $2.37 billion. Comcast's share was $1.29 billion, followed by Time Warner Cable's $632.2 million, and Cox's $248.3 million. (See SpectrumCo Gets Licenses .)
Sprint's involvement in SpectrumCo has been limited from the get-go. It did not participate in the auction, but did serve as a member of the bidding consortium. It held a non-voting 5 percent equity stake at the time the SpectrumCo partnership was formed. Sprint's withdrawal will allow it to recoup its investment.
Sprint said it is withdrawing from the spectrum consortium so that it can focus on "primary strategic initiatives" with the cable industry, which includes the "Pivot" cellular service joint venture with Comcast, Time Warner Cable, Cox, and Bright House. Those parties announced the cellular partnership in November 2005. (See Cable Firms, Sprint in Fixed/Mobile Deal.)
"This action has been long-planned and the withdrawal from participation in SpectrumCo does not reflect a change in strategy or focus," the company said in an emailed statement. "Sprint Nextel and its cable partners remain committed to their current initiatives, including Pivot."