Sprint (S) has lingered in U.S. telecom's second tier largely because it didn't have weapons to take on big-timers like Verizon (VZ) and AT&T (T).

By adding 4G wireless Internet provider Clearwire (CLWR) to its arsenal on Wednesday, Sprint took a big step toward becoming a formidable competitor.  

Just days after Japan's Softbank announced plans to buy a 70% stake in Sprint for $20.1 billion, Sprint turned around and paid telecom pioneer Craig McCaw's Eagle River Holdings $100 million for his stake in Clearwire. 

That gives Sprint a 50.8% controlling share. More importantly, it gives the company an Internet provider to compete with Verizon's FiOS and AT&T's U-Verse. Sprint held a 48% stake in Clearwire before the deal.

Since lobbying against AT&T's proposed merger with T-Mobile and effectively scuttling the deal, Sprint found itself squeezed on both sides of the wireless market. Already lagging behind AT&T and Verizon at the high end, Sprint saw new competition at the low end as T-Mobile announced plans to merge with prepaid wireless provider Metro PCS earlier this month.

Sprint has had a tough few years. Revenue fell from $35.6 billion in 2008 to $33.6 billion last year. The company lost between $2.4 billion and $3.5 billion in each of those years and was on pace to lose roughly $5 billion this year, thanks largely to continuing fallout from its merger with Nextel in 2005 and its roughly $21 billion in debt.

Sprint has been recovering from the merger and its debt, but it has been a slog until Softbank showed up. It's been a little more than a year since Sprint reached an agreement with Apple to sell the iPhone, but it sold only 4.8 million of the devices in the first three quarters. By comparison, Verizon sold 5 million iPhone 5s the first weekend after it was launched. Since then, Apple has sold more than 98 million iPhones, meaning Sprint could muster only about 5% of all iPhone sales.

Sprint recently began charging customers an $18 upgrade fee and $10 per month just to own one of its network's smartphones. To say it's looking for more revenue is an understatement, but Clearwire may be one way to get it. The provider pulled in $1.3 billion in revenue during its last fiscal year, but its $316 million in revenue last quarter was down slightly from the same period last year.

Meanwhile, Verizon's FiOS generated revenue of $2.5 billion in the third quarter alone, and it has video service that Sprint still lacks. AT&T similarly bundles television, Internet and voice service into its U-Verse packages and has 6.8 million subscribers, compared with Clearwire's 1.3 million.

It's a big pickup for Sprint but still small-scale stuff by Verizon and AT&T standards. Diversifying offerings is a huge deal, but it's going to take more than Clearwire for Sprint to get as big as its dreams.

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