Clearwire & Sprint: On Again?

More details are emerging about a renewed WiMax venture between Clearwire LLC (Nasdaq: CLWR) and Sprint Corp. (NYSE: S) that would be funded by Intel Capital and others.

The Wall Street Journal reports this week that the chipmaker's venture capital arm could pump as much as $2 billion into a Clearwire-Sprint venture. Intel Capital has already invested over $600 million in Craig McCaw's wireless venture, the largest investment the firm has made in a single company. Intel Capital more typically provides funding of $10 million or less for startup companies.

Unstrung reported last week that such a deal could be announced very soon. (See Clearwire-Sprint Deal Soon? ) ThinkEquity LLC analyst Eric Kainer says that, in addition to Intel Capital, the deal could be backed by Google (Nasdaq: GOOG) and SK Telecom (Nasdaq: SKM). Kainer reckons that Clearwire is "close to the finish line" with a new deal.

There's been rumors of a reformulated Sprint-Clearwire deal since they split in November 2007. Sprint dissolved its partnership with Clearwire in November, saying the deal was too complex and the companies could not "reach final agreement on the terms of the transaction." The alliance between the operators was originally inked in July 2007. (See Sprint Reconsiders WiMax Plans.) The reason for a new funded venture is simple. Clearwire and Sprint need money to cover the massive costs of rolling out a nationwide WiMax network in the U.S.

Clearwire has always been open on the need to further fund its business plan. "We do not expect to satisfy all of our long-term capital and spectrum acquisition needs through this offering," the company wrote in its IPO documents in March 2007. (See Clearwire's Cash Craving.) The firm initially secured $1.2 billion in private funding, $600 million through the IPO, and a $1 billion loan facility in August 2007. This was followed by the partnership deal with Sprint in November, which was further supposed to reduce the company's network expenditures. Nonetheless, Sprint has estimated it will spend $3 billion on deploying WiMax through 2008.

The costs for Clearwire working alone are higher because it is a "greenfield" operation that has to build out all its own cellsites. Some analysts have predicted that this could cost anywhere between $5 billion and $10 billion. (See Clearwire's Bubble Bursts.)

The companies have not made any official comment on a new WiMax partnership. Clearwire did, however, recently confirm that it was working on a WiMax roaming deal with Sprint. (See Clearwire Roams With Sprint.) — Dan Jones, Site Editor, Unstrung

wimaxed 12/5/2012 | 3:47:42 PM
re: Clearwire & Sprint: On Again? Though the Sprint, Clearwire & Intel deal is just a rumor for now it makes the most sense. All three companies will benefit from it. Sprint and Clearwire need each-other for the national wimax coverage and Intel needs the wimax carriers to sell the chips. Sprint needs the money since the company has been losing lots of customers lately.

--- http://www.wimaxed.com
freetoair 12/5/2012 | 3:47:42 PM
re: Clearwire & Sprint: On Again? Intel's Desperation

Gă¬is tragic/laughable/stupidGă¬they tried to compete in mobile silicon but QCOM/TI were just too dominateGă¬.and they did not have a better mousetrapGă¬you do not need a Stanford MBA to figure it out.

OK. So we will change the gameGă¬great on the surfaceGă¬uh but the bozos on Intel staff and venture fund do not understand the wireless GăúsystemsGăą market.

Hey whateverG㬠Intel has a lot of money to place bets with G㢠but if I were Otellini I might consider some changes in the team at the venture fund (but then again he is approving this soG�??).

Wow...Intel says that the current 3G/LTE economics do not workGă¬too costlyGă¬but the key is to support legacy (2/2.5/3G) plus WiMAX...uh so the legacy cost model does not work but the key is to support legacy plus WiMAX and somehow the cost model works??? WTF


'Shorts' I look forward to seeing you in 2010 for the articles on IntelGăÍs blunders in WiMAX and the billion dollar losses/write-offs in these investments.

Sprint, although also bozos, at least is smart enough to put all the risk on vendors (Samsung, Motorola, Nokia) and mis-guided folks like Intel.

Ah...lets see Moto is on the ropes on all fronts, Nokia has not delivered WiMAX to Sprint (but is dumping tons of R&D into LTE) and Samsung is hoping that this business will get sime legs given disappoints with WiBro uptake in Korea.

Wow...I am pissing my pants.
joset01 12/5/2012 | 3:47:38 PM
re: Clearwire & Sprint: On Again? The interesting thing is to see how much money will go into this. Intel, Google etc are supposed to be investing. $2B doesn't seem like it will be enough to me. How high could it go?

IPobserver 12/5/2012 | 3:47:32 PM
re: Clearwire & Sprint: On Again? Many of the arguments for WiMax are also true of LTE (high-speed, low IPR).

I wonder at what point does Intel start developing LTE chipsets?

I'd guess it has already startedG㬠unless it really is getting religious about this WiMax vs 3GPP debate.
charlie47 12/5/2012 | 3:47:22 PM
re: Clearwire & Sprint: On Again? http://www.youtube.com/watch?v...
maestroRF 12/5/2012 | 3:47:00 PM
re: Clearwire & Sprint: On Again? I can't believe I wasted my time watching that. I feel so dirty...quite probably the stupidest thing I've ever seen. Oh well, there's a few minutes of my life I'll never get back.
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