Sprint CEO Dan Hesse disclosed the non-binding memorandum of understanding (MOU) during a conference call on Wednesday to discuss Sprint's third-quarter financial results. The news cleared up some of the uncertainty around Sprint's relationship with Clearwire, which provides Sprint's 4G services today through its WiMax network. At an analyst conference on Oct. 7, Sprint had described plans for its own LTE network but with Clearwire.

If Sprint and Clearwire can work out the engineering details and reach a business deal, Sprint would probably start buying LTE capacity from Clearwire in 2013 to augment its own network, Sprint said. Sprint's own network is set to launch commercially in the middle of next year and be mostly complete by the end of 2013.

Although Sprint owns a majority of Clearwire's shares, the two companies announced plans for their next-generation networks separately. Clearwire said in August it would add LTE to its WiMax network but was still seeking funding for the US$600 million project. Some observers were concerned that Sprint seemed to be bypassing a valuable partner in Clearwire, which has some of the strongest radio spectrum holdings in the U.S.

Because of differences in their spectrum, Sprint and Clearwire plan to use different types of LTE networks. Sprint will use FD-LTE (frequency-division), which transmits and receives signals over different frequencies, while Clearwire will use TD-LTE (time-division), which transmits and receives over the same frequencies.

Under the MOU, the two service providers have agreed to cooperate on smooth handoffs between their future networks, chips to be used in devices, sites and timing for building base stations, and other details, Hesse said. They are still discussing a business arrangement for Sprint to make use of Clearwire's network and will give further details after that deal is finished, he said.