But while the deal was called “necessary” it's still stupid, because neither partner here has a viable business model.
The reason, as I've said here many times before, is that telecomm capital has a negative return on investment. You can't get enough money from customers in the space to pay for the gear, its installation, its maintenance, and the back-office capabilities needed to run the business.
Not with today's business model.
That model is predicated on the idea that spectrum is property, and that the companies holding spectrum are property developers. Each must build out a nationwide network in order to play in the game, while customers get a limited number of network choices, which is supposed to mean competition.
In fact, as Clearwire is learning, the cost of building out a nationwide footprint is ruinous. Since you're only being given a chance to compete after that investment, you can't bring in enough traffic to make the system pay.
Far better is a utility model. You bring spectrum and only necessary infrastructure to the party. Then you sell access to the resource, based on costs, to anyone who wants to use it. You then define the business not by ownership of the capital resource, but on the simple need to recoup costs. You let the customers define what the network does through their purchase of equipment.
That's how WiFi works. It's how the Internet works. Because WiFi spectrum is held in common, because both WiFi and the Internet are based on standards focused on interoperability and/or a desire to avoid interference, huge markets have developed and the use of that resource has transformed the way people communicate.
If the U.S. government were able to buy back the spectrum held by Sprint and Clearwire, and make it unlicensed spectrum, we'd have a market boom like no one has ever seen before. Sprint and Clearwire would then act as ISPs, while other companies could peer with them to build out the network.
Unfortunately that would be “socialism,” just as I guess the Internet is socialism, just as the NFL is socialism. So the capitalists will waste capital until it's all gone.
If you own these companies, sell them. Stay out of the space. Don't touch the bonds, either. Until the present market structure is blown up, no one is making any money.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.