Last week Clearwire announced that they intend to adopt LTE in addition to their WiMAX network. With cash running low, some investors fear that Clearwire may default on their debts, as they are not generating enough money.
Service Providers
The Taipei Computer Association suggested on Tuesday that four of Taiwan’s top WiMAX wireless broadband operators should merge to achieve economies of scale. Thus, Global Mobile, Vmax Telecom, Vee TIME and Tatung InfoComm are considering merging into two operators, one operator providing Wimax to the northern half of Taiwan and the other to the south.
Clearwire, the financially troubled WiMAX conglomerate shared grim news in a conference today, announcing that CEO Bill Morrow would be stepping down “for personal reasons.” He is also leaving the company’s board of directors. Morrow will be replaced in the interim by board chairman John Stanton. Other senior positions at Clearwire will be vacated as well, requiring a shake-up of executive talent at the company.
According to the press release, this changing of the guard should not impact the company’s talks with its partner Sprint. Sprint, Clearwire’s majority owner, has engaged the WiMAX company in a pricing dispute, the resolution of which as yet to be determined. Clearwire assured investors that “an agreement with Sprint is imminent.”
Clearwire has been hit recently with all sorts of issues. If the muddle with Sprint and exec shuffle aren’t enough, Clearwire is still in dire need of funding to complete its rollout of a national 4G WiMAX network. And they’re being sued. In a claim filed just a week ago, several Clearwire subscribers claim that the company has deliberately slowed their internet connections in order to ease congestion on its network. Such practices are not uncommon in the telecom world. Verizon also began ‘throttling’ its network this year, though they’ve been extremely transparent about how and when they manipulate the network and who’ll be affected. Comcast did settle a throttling case for $16 million in 2009, when they were sued for throttling the connections of a specific company.
The plaintiffs claim that Clearwire falsely advertises for high-speed internet that they won’t end up providing and penalizes those who wish to cancel their service by tagging them with an early termination fee. Furthermore, they claim that the WiMAX company is running a Ponzi-esque scheme wherein they attract subscriptions under the pretense of providing high-speed internet. In fact, say the plaintiffs, the company lacks the infrastructure necessary to power its network. By signing up customers, Clearwire hopes to drum up enough money to someday complete their network rollout and make good on these promises and advertisements.
Whether or not these claims will be vindicated, it seems pointless to say that the future looks bleak for the 4G company. … Read the rest
