NNSquad - Network Neutrality Squad
[ NNSquad ] Clearwire in deep financial trouble, may not survive
----- Forwarded message from David Farber <dave@farber.net> ----- Date: Fri, 5 Nov 2010 21:47:43 -0400 From: David Farber <dave@farber.net> Subject: [IP] Clearwire in deep financial trouble, may not survive Reply-To: dave@farber.net To: ip <ip@listbox.com> 578BA2E2-E94A-11DF-9B08-5911C6F4DBAC: Begin forwarded message: From: Dewayne Hendricks <dewayne@warpspeed.com> Date: November 5, 2010 6:52:11 AM EDT To: Multiple recipients of Dewayne-Net <dewayne-net@warpspeed.com> Subject: [Dewayne-Net] Clearwire in deep financial trouble, may not survive Reply-To: dewayne-net@warpspeed.com Clearwire in deep financial trouble, may not survive November 4, 2010 at 11:15 PM by Paul Kapustka <http://www.muniwireless.com/2010/11/04/clearwire-financial-trouble-may-not-survive/> Clearwire announced yesterday that it may run out of money in mid-2011 and may not be able to continue as a “going concern”. This is an analysis of Clearwire’s challenges as it struggles to survive. It really is the best of times and worst of times for nascent national WiMAX provider Clearwire — even as the company reported record subscriber growth of 1.23 million new adds during the third quarter of 2010, it also reported 15 percent staff layoffs, market delays and other cost-saving measures to offset the company’s inability to secure new, necessary funding for its ongoing operations. While the demand for the company’s 4G broadband services seems to be expanding — Clearwire now expects to finish the year with more than 4 million total subscribers, double the number the company projected at the start of 2010 — Clearwire’s complex ownership structure and bootstrapped funding model have led to a poker-game type battle over how and from where the company might secure additional funding. Even though Clearwire has attracted billions in funding, from its inception in 2008 to some additional billions last year, its costly, rapid buildout of more than 60 WiMAX markets along with revenues just starting to materialize has left the company staring at a funding tank approaching the “E” mark, with no friendly filling station in sight. Unlike last year, when majority owner Sprint stepped up to finance Clearwire, 2010 saw some public disagreements between Sprint and Clearwire execs over Clearwire’s operations. Though never confirmed, the difference in strategic opinions may have been partly behind the resignation of Sprint CEO Dan Hesse from Clearwire’s board earlier this fall, and not a small part of Sprint’s reluctance to commit additional capital to the Clearwire cause. According to CEO Bill Morrow, the company is still considering all options for new funding, including selling Clearwire stock, adding more debt, or selling or renting some of the company’s wireless spectrum holdings. [snip] Dewayne-Net RSS Feed: <http://www.warpspeed.com/wordpress> ------------------------------------------- ----- End forwarded message -----