Clearwire Sells $1.2 Billion In Debt - InformationWeek
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12/3/2010
07:15 PM
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Clearwire Sells $1.2 Billion In Debt

With Verizon's 4G LTE network rollout stoking competition, Clearwire is considering selling spectrum or adding investors to fund its network buildout.

Under pressure to fund its rapidly growing 4G network, Clearwire reported Friday that it has successfully sold $1.2 billion in debt, but is still considering selling some spectrum or bringing in additional strategic investors to raise more cash.

The firm's 4G wireless network has been deploying rapidly and is likely to get a new competitor beginning Sunday when Verizon Wireless debuts its new 4G LTE network in 38 U.S. cities. The Verizon modem-only offering, however, still does not offer voice.

Clearwire and its wholesale strategic partners led by Sprint Nextel are marketing the 4G broadband service in 68 U.S. markets and expect to cover 120 million citizens by year's end.

"We're still in search of more money in order to continue the aggressive buildout of the company," said Clearwire CFO Erik Prusch at an investment analysts meeting Friday. He added that he expects to have "some clarity" on the financial situation around the end of the year.

The company and its majority-owner, Sprint Nextel, have tried to clarify their dynamic relationship this week. After Sprint executives, including chief executive Dan Hesse left Clearwire's directors board, Sprint named three non-Sprint executives to the Clearwire board. With Hesse off the board, Clearwire founder Craig McCaw has taken a more active role in the company.

Previously, Clearwire said it would lay off 15% of its work force and take other steps to conserve cash. The company's WiMax network has generally performed well and it has the advantage of beating Verizon's high speed LTE network to market, paving the way for a WiMax-LTE battle of wireless titans.

At the Friday meeting, Prusch declined to provide details on the company's plans for spending the new funds, but he indicated the new funds will provide the firm with flexibility, according to media reports.

SEE ALSO:

Clearwire Cost Reduction Measures Include Layoffs, Product Delays

Sprint In $1.5 Billion Clearwire Financing; Google Out

Clearwire Prepares Mobile WiMax Launch In Atlanta

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