Money Pit? Clearwire to Get Cash Infusion

Sprint Nextel (S) and other Clearwire (CLWR) investors are reportedly going to pump another $1.5 billion into the WiMax provider.

According to the Wall Street Journal (Techmeme):

Sprint would invest $1 billion and its Clearwire joint venture partners, a group which includes Comcast Corp., Intel Corp, Time Warner Cable Inc. and Bright House Networks LLC, would kick in another $500 million, said these people. Google Inc., which has been a key joint venture partner, isn’t involved in the latest financing round, these people added.

The announcement is supposed to come this week.

The latest round of funding is necessary if Clearwire’s partners want to keep WiMax alive. WiMax has big backers, but the horse that’s going to carry the technology across the finish line—Clearwire—isn’t exactly a thoroughbred. Meanwhile, Verizon (VZ) and other big carriers are betting on LTE, a rival technology to WiMax.

At least Clearwire can continue its rollout into major metropolitan areas. Clearwire was betting on a big fourth quarter, but that was a date with disaster from the start.

Comments

[Nextel Acce...:]

This is a great product, give it time and as the footprint gets bigger, customer's will come!

Nov 09 05:41 PM

[Calimornya:]

LTE is going to outclass whymax in 2012 (lower frequency, deep customer base) before sprint wire can get volume adds. Rights offering dilutes shareholders. Clwr going the way of metrocom and a hundred others who also overspent rolling out a second tier service

Nov 10 01:25 PM

[findthelawyer:]

By the time LTE starts rolling out at least in mid 2012, the market share game would be over for it. Clearwire by then would have the largest chunk of market share, that newer technology would not make much difference. Remember Betamax with Sony and VHS with JVC? Even though betamax was perceived as better, but because of larger market share, Betamax eventually lost the battle.

History repeats itself.

Nov 11 06:18 PM