Clearwire Close to $200M in Vendor Financing

Clearwire LLC (Nasdaq: CLWR)'s CFO said Wednesday afternoon that the company is close to closing $200 million in vendor financing for its Long Term Evolution (LTE) build as it eyes grabbing some extra wholesale customers from the LightSquared affair.

Talking on the company's fourth quarter earnings call, CFO Hope Cochran said the company is looking to a secure a total of $300 million in vendor financing. This should pay for around half of the operator's proposed total $600 million spend for its LTE TDD build in 2012 and 2013.

The company is also expecting to see $687 million in 2012 from its old and new wholesale agreements with part-owner Sprint Corp. (NYSE: S). This will shore up Clearwire's liquidity position until LTE comes online in 2013.

The company is planning the overlay network deployment now. It is expected that build out will start this quarter.

Overall, Clearwire is expecting to drop $450 million to $550 million on capital expenditures in 2012. Most of that spend will happen in the second half of the year.

Clearwire CEO Erik Prusch is expecting "multi-band, multi-mode" devices that can support LTE TDD and other networks to arrive in 2013. The company is working with China Mobile Communications Corp. and others to make it happen. (See Clearwire's LTE TDD Buddy System.)

Prusch didn't comment much on the LightSquared debacle after the Federal Communications Commission (FCC) moved to block that venture's proposed LTE network on Wednesday. In a response to analysts' questions, however, he hinted that Clearwire might pick up some of the 4G wholesale slack. (See FreedomPop Bets on 4G With Clearwire and FCC Moves to Block LightSquared .)

"As regards LightSquared, we continue to field a lot of inbound inquiries, and we are pleased with the opportunities in the pipeline, and that’s about as far as I’d like to go with that," Prusch said.

The operator is working with Sprint on more wholesale opportunities. "We are looking at trying to develop a whole range of wholesale models out there," Prusch commented.

— Dan Jones, Site Editor, Light Reading Mobile

joanengebretson 12/5/2012 | 5:42:29 PM
re: Clearwire Close to $200M in Vendor Financing

It seemed like LightSquared announced a new customer deal every other week or so while it was planning its network. And Clearwire seems to be the logical (perhaps the only) option for those customers now that LightSquared appears to be dead.

There's only a few players building 4G networks -- and the big guys (AT&T and Verizon) aren't known for offering attractive pricing to other service providers.

joset01 12/5/2012 | 5:42:28 PM
re: Clearwire Close to $200M in Vendor Financing

Yeah, I do have to wonder what kind of pricing deals LightSquared was offering potential customers though.

krishanguru143 12/5/2012 | 5:42:27 PM
re: Clearwire Close to $200M in Vendor Financing

It was either very cheap or they had a vault of photo negatives.


How soon before Harbinger Capital files for bankruptcy?

joset01 12/5/2012 | 5:42:27 PM
re: Clearwire Close to $200M in Vendor Financing

My thinking is that the lawsuits will happen before that. LightSquared has hinted at legal recourse before. I don't think it'll be pretty.

krishanguru143 12/5/2012 | 5:42:26 PM
re: Clearwire Close to $200M in Vendor Financing

They can try, but the conditional waiver was pretty clear.  The issue had to be resolved to the satisfaction of the commission.  So while it won’t be pretty, LightSquared will just be tossing more money away.  When LightSquared does lose, the FCC could ask for damages to cover legal expenses.  What is LightSquared going to do then?  They spent even more money fighting, then more to cover the legal bills of the party they sued and what do they have at the end of day?


There is talk that LightSquared might seek a spectrum swap.  With how LightSquared has been running their mouth off, they are not making any friends.   It very well could come down to this, the government will do nothing for LightSquared at all except to ignore them.

joset01 12/5/2012 | 5:42:25 PM
re: Clearwire Close to $200M in Vendor Financing

Right, didn't say it will work, but that's my impression of what could happen next.

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