Key Excerpts from the Clearwire IPO Filing (CLWR)

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Clearwire (CLWR) filed an S-1 with the SEC yesterday, aiming to raise up to $400 million with the assistance of Merrill Lynch, Morgan Stanley, J.P. Morgan Securities, Bear Sterns, and Wachovia Capital Markets. Highlights from their filing:

What is Clearwire?

We provide next generation wireless broadband services that enable fast, simple and reliable communications anytime and anywhere within our coverage area. Our advanced, capital efficient wireless network not only creates a new communications path into the home or office, but also facilitates access to information, interactive media content, applications and communications services away from the home or office...

We were founded by telecommunications pioneer Craig O. McCaw in October 2003, and we launched our first market in August 2004. As of March 31, 2006, we offered our services in 27 markets in the United States covering more than 200 municipalities with an estimated 4.8 million people. In addition, we offer wireless broadband services in Brussels, Belgium and Dublin, Ireland, which together cover an estimated 1.0 million people. Our unconsolidated joint ventures offer wireless broadband services in 7 regional markets in Denmark and Mexico, covering an estimated 10.0 million people. As of March 31, 2006, we provided portable wireless broadband connectivity to approximately 88,000 subscribers in the United States and approximately 11,500 subscribers in Belgium and Ireland.

We deploy our network using licensed radio frequencies, or spectrum. Using licensed spectrum enables us to minimize interference that frequently occurs on other wireless networks. In the United States we use spectrum in the 2.495 to 2.690 GHz band, and we believe that we have the second largest spectrum position in this band in the United States. If all our pending acquisition and lease agreements close, we have spectrum that covers an estimated 157 million people, of which an estimated 90 million people were located in areas where we have enough spectrum depth to launch our services. In our international markets we typically use spectrum in the 3.5 GHz band. As of March 31, 2006, we controlled enough spectrum in Belgium, Ireland, Romania and Spain to enable the deployment of our wireless broadband services to markets covering an estimated 74 million people. In addition, as of March 31, 2006, our unconsolidated joint ventures controlled enough spectrum in Mexico and Denmark to enable the deployment of our wireless broadband services to markets covering an estimated 51 million people.

Our advanced next generation wireless broadband network relies on non-line-of-sight, or NLOS, technologies, which we believe provide a level of performance comparable to that expected from the evolving WiMAX standards. NextNet, our wholly-owned subsidiary, designs, develops and sells modems, base stations and other equipment that enable deployment of NLOS, wireless broadband connectivity. Through its deployment in our network and networks owned and operated by providers in other countries, we believe NextNet is the most widely deployed provider of NLOS, plug-and-play broadband access systems, with equipment in use in at least thirty different countries across Africa, Asia, Europe and the Americas. In March 2006, BCE Inc. and Rogers Communications, two of the largest wireline, cable and wireless operators in Canada, launched a nationwide next generation wireless broadband network using NextNet technology.

As compared to cellular, cable and DSL networks that generally rely on infrastructure originally designed for non-broadband purposes, our network was designed specifically to support portable, and eventually mobile, wireless broadband services. We have designed an IP-based Ethernet architecture for our network that we believe confers significant economic and technical advantages since it simplifies deployment, operation, maintenance and use of our network in addition to supporting a broad range of potential premium services.

We believe our success to date is in part a result of the substantial operating experience of our senior management team, led by our Chairman and Co-Chief Executive Officer, Mr. McCaw. The members of this team have significant experience in the communications industry with companies such as McCaw Cellular, AT&T Wireless, Nextel Communications and Nextel Partners.

Product Portfolio:

We operate in two reportable revenue generating segments: wireless broadband services, or services, and wireless broadband network equipment, or equipment. Our services segment includes both our United States and international operations that provide wireless broadband services to individuals, small businesses, public safety organizations and others. Our equipment segment provides base station, CPE and other equipment designed and developed by our NextNet subsidiary. The following table sets forth summarized financial information concerning our reportable segments for the period from October 27, 2003 (inception) to December 31, 2003 and for the years ended December 31, 2004 and 2005.

[click on table to enlarge]

Technology and Network Equipment

Our system is a wireless IP-based, Ethernet platform built around an Orthogonal Frequency Division Multiplex, or OFDM, and Time Division Duplex, or TDD, physical layer, which allows us to address two challenges that face wireless carriers, namely NLOS performance and frequency utilization.

OFDM is a physical layer protocol for NLOS broadband networks that uses a large number of individual carriers and a process of mapping a user’s data to those carriers to leverage the presence of multi-path to transmit and receive robustly in the NLOS service environment. OFDM is preferable to single carrier technologies for addressing multi-path and frequency-selective fading in a broadband channel.

TDD allows for upstream and downstream links to the network to exist on the same radio frequency channel, meaning that there is no need to use multiple channels or to have guardbands between downstream and upstream channels. Thus, TDD enables wireless broadband access systems to be deployed on any channel in the radio frequency band, making it flexible for a carrier managing non-contiguous spectrum. TDD also allows a service provider to maximize spectrum utilization by allocating up/down link resources appropriate to the traffic pattern over a given market.

Our CPE is a NLOS wireless modem that connects to any IP-based device, such as a computer, using a standard Ethernet connection. It is simple to install and requires no service provider configuration or support and no software download or installation. A subscriber need only connect our CPE to an external power source and to their computer. For those subscribers who live on the perimeter of our coverage area or who otherwise might have difficulty receiving our service, we also offer an optional outdoor subscriber unit that can be installed on the exterior of the subscriber’s home or office to obtain signals over an extended range.

Our base station allows for 360 degree coverage by employing multiple transceivers and antennas on a single tower for maximum subscriber density and spectral efficiency. This setup is scalable, expandable and flexible, allowing us to control costs to promote efficient expansion as our subscriber base grows. Our base stations generally are located on existing communications towers, but can also be placed on rooftops of buildings and other elevated locations. We generally lease our tower locations from third parties.

We also utilize a network management system that incorporates a complete set of management tools to enable the configuration, management, monitoring and reporting of all elements of network. It provides secure centralized and remote configuration of base stations, CPEs, switches and other network elements. The system reports to and alerts system administrators to alarms and faults, and monitors system performance down to the individual CPE. It supports customizable report generation to track network performance, utilization, and capacity.