Sprint to Buy Remaining Ownership of Clearwire?
The writing has been on the wall almost since its inception, with a trail of clues leading from Wall Street to Overland Park, KS all the way west to Kirkland, WA, the days of Clearwire operating its own network under its own board of directors and, most importantly, under its own symbol on the ticker may be drawing close to an abrupt and uneventful halt. Sources familiar with the matter told the Wall Street Journal that Sprint Executives, most particularly Dan Hesse are disappointed at Clearwire’s Network Expansion and deployment as well as its overall strategy. Not a very desirable choice of words as Clearwire is due for another round of funding here by the end of the year. It is expected that Sprint will use over $1 Billion in cash to provide for this round of aid and debt obligations – however, with a disappointing network Sprint could very well use its cash to simply buy out the remainder of Clearwire’s ownership in the company. Dan Hesse himself, in a recent earnings call with Goldman Sachs, JP Morgan Chase, Citi Group and others is slow to add fuel to the speculative fire:
“I get a lot of questions about Clearwire and about Sprint’s network RFP. On the topic of Clearwire, we have an advantage in the aligned ownership interests we share with the cable partners, Intel and Google and we benefit from the many contributions they have brought to the table and we benefit from the resale of 4G services… As in the past, any strategic or funding decisions about Clearwire must be a collective decision among the strategic investors and the Clearwire Board. Beyond that, we are not going to comment on the ongoing media speculation.”
That’s CEO speak for “DROP IT, I’m not here to degrade Clearwire’s already poor stock position”. It makes no difference whether Clearwire decides to sell NOW or LATER, their position has been (from the beginning) to acquire as many customers as possible in an effort to be taken over by a carrier that doesn’t have its own spectrum (think Comcast OR of course Sprint). However the recent success in the new Clear markets should slow the speculation for now as Clearwire is on pace to hit corporate metrics and surpass 2 million customers by the close of business 2010.