Tag: clearwire

Sprint snaps up the rest of Clearwire for $2.2 billion

US telecoms provider Sprint has purchased the remainder of Clearwire in a deal worth $2.2 billion.

Sprint announced that it has entered into a definitive agreement to acquire the remaining 50 percent of the firm, following its previous investment in the mobile broadband company.  

The deal saw Sprint pay $2.97 per share, valuing the firm at a total of $10 billion, including net debt and spectrum lease obligations of $5.5 billion.   This meant an increase on the $2.60 per share that Sprint originally offered in its first bid last month.

The deal will see $800 million of additional financing available to Clearwire in the form of exchangeable notes, according to a Sprint statement.

The transaction was unanimously approved by Clearwire’s board, with shareholding companies such as Comcast and Intel indicating their support for the deal.  

Softbank, which has acquired 70 percent of Sprint, also gave the thumbs up to the deal.

Sprint CEO Dan Hesse, who recently took a paycut, said that the deal will enable the firm to make the most of ClearWire’s wireless spectrum, adding it to its own network capacity.

“Today’s transaction marks yet another significant step in Sprint’s improved competitive position and ability to offer customers better products, more choices and better services,” Hesse said.  “Sprint is uniquely positioned to maximise the value of Clearwire’s spectrum and efficiently deploy it to increase Sprint’s network capacity.” 

He added: “We believe this transaction, particularly when leveraged with our SoftBank relationship, is further validation of our strategy and allows Sprint to control its network destiny.”

The deal is expected to be finalised in during the middle of 2013, coinciding with SoftBank’s investment in Sprint.

Clearwire to sell off $1.1 billion of debt

WiMax provider Clearwire has revealed today that it is to sell off at least $1.1 billion of its debt in a bid to keep the company going.

The move comes after a statement earlier this month that it may not be able to keep operating, due to huge losses and debt. On November 4 it said it expected losses to continue and that there was uncertainty surrounding the possibility for obtaining additional investment.

With the threat of the company going bust, there is little it can do but try to sell off its debt. It is expected to offer $175 million of its senior debt for sale, with a due date of 2015. $500 million is due in 2017, while a further $500 million is due by 2040.

The company, which is 54 percent owned by Sprint, is cutting 15 percent of its employees, along with reducing overall spending by between $100 million and $200 million. The financial difficulties have also caused an indefinite delay to a planned smartphone the company was working on.

With WiMax already struggling against the more supported LTE, the difficulties Clearwire is facing won’t do the proto-4G offering any good.

Sprint and Clearwire announce dates for WiMax launch

Clearwire and Sprint have said they will be launching their respective “4G” mobile internet services in Los Angeles later this year. Only it’s not quite that level of G’s yet – it’s WiMAX which isn’t 4G.

The companies have officially set launch dates for their WiMAX services. New York will see the first launch on November 1, Los Angeles on December 1 and San Francisco around the end of December. Both companies will be launching the service under their own brands.

Sprint, a 55 percent owner of Clearwire, will offer the service using space on Clearwire’s network.

There’s some kind of tension between the two outfits, in fact three top Sprint executives recently resigned from Clearwire’s board.

According to Sprint, Sprint “4G” will allow customers to instantly download large files to get work done, or use the fast broadband service to watch online videos wherever they are in town.

It’s also offering a range of WiMAX devices, including compact USB modems and Intel embedded laptops and netbooks. Intel loves WiMAX but it might look at LTE, too.

Clearwire’s “4G” service, Clear, will allow customers to buy online. But “4G”-only mobile services are not yet being offered.

Russian mobile operators stop WiMAX roll out

Late last week, Russian WiMAX (Worldwide Interoperability for Microwave Access) operator Yota made a surprise move. The company said it will now deploy LTE (Long Term Evolution) technology as it continues its wireless broadband rollout. The operator had been an early WiMAX proponent and recently rolled out WiMAX service in Nicaragua and Peru.

Yota said that instead of moving ahead with its original plans to roll out WiMAX in 15 new markets, it will roll out TD-LTE in five new markets this year. In a press release Yota’s CEO, Denis Sverdlov said, “Yota is a services company; for us technology is an instrument. It’s clear that the LTE standard is becoming the main trend in wireless communications.” TD-LTE is widely used in China, but is relatively rare in North America.

In the US, since it was founded by cell phone entrepreneur Craig McCaw, Clearwire has been the major proponent of WiMAX. During Clearwire’s start up, McCaw convinced Intel to put in $600 million to back his ideas for a worldwide implementation of WiMAX. Intel’s plans were to offer WiMAX chipsets in all of its laptops. Along the way, Clearwire and Sprint had an on-again, off-again relationship. In 2008, that relationship evolved into Sprint’s majority stake in Clearwire. Sprint now resells Clearwire’s WiMAX infrastructure. Sprint recently announced its Android based , HTC Evo 4G WiMAX capable smartphone for shipment later this summer.

Last fall, it was estimated that Clearwire could need up to $3 billion in new funding to complete its current build out plans covering 120 million potential customers by the end of next year. That funding was expected to come from Sprint Nextel, which owns 51 percent of Clearwire, and the rest likely to be from either its cable partners or possibly from T-Mobile USA. Clearwire has WiMAX live in 27 markets while LTE hasn’t launched yet commercially in the US. However, Verizon and AT&T have committed to LTE for 2011.

Last year at Intel’s IDF keynote speech, David Perlmutter, VP of Intel’s mobility group, said in part: “We have (WiMAX) networks being built in North America, in Russia, in Japan … We are building with our partners’ networks in other places like India, Malaysia, Taiwan. And many, many other places have all sorts of mobile and fixed WiMAX all over the globe.”

Just a few weeks ago, Intel and Clearwire revised their WiMAX technology agreement giving Clearwire the option of also adopting LTE. The original Intel agreement required Clearwire to exclusively use WiMAX. Clearwire CEO Bill Morrow said Clearwire had not made any decisions regarding LTE. But, it has an RFP (Request For Proposal) that has many options including how to run both LTE and WiMAX on the same network.

The Indian WiMAX market was, up until recently, looked at as one of the easy prizes for WiMAX to win. Last week after 34 days of 183 rounds of bidding, India concluded the auction of its 3G mobile spectrum. This week, the next phase of India’s BWA (broadband wireless access) is in full swing. The contenders for the 4G spectrum are companies backing either LTE or WiMAX. Earlier this year everybody thought WiMAX would take home most of India’s 4G BWA spectrum. Now, maybe not.

Yota’s decision may have a profound impact on India’s 4G auction. Monday’s RCR Wireless has an excellent analysis of the Indian BWA. They said that, “What looked like a sure thing for WiMAX, suddenly looks anything but …”

Professor Willie Lu, Director of US Center for Wireless Communications in Palo Alto, California, has been a leader in mobile radio theory. Lu has six axioms of wireless communications. The first is “No single Radio Transmission Technology (RTT) can do both Broadband High-speed and Seamless Mobility in a commercial environment.” The background of “Lu’s Laws” will be fully explained at an upcoming conference in San Francisco.  

Yota’s decision can be seen as the next evolutionary step as more and more wireless carriers are moving in the direction of 4G dual-mode topology. However, Intel might see it as poking a hole in its WiMAX life raft.