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It’s been quite a while since I looked in on Clearwire (CLWR), and their big bet on WiMax. Frankly, not much has changed. I believed back then — and do even now — that WiMax is a technology solution that’s somewhat overhyped.

Clearwire is still spending money. Intel (INTC) is still touting it, as well as is Google (GOOG). Meanwhile, WiMax is enjoying adoption primarily in emerging markets which have little entrenched infrastructure.

Yet in the US, its progress is slow. The recent macroeconomic environment can’t have been good for CLWR, as it needs capital to maintain any lead it has on incumbent cellular providers. Meanwhile, LTE is starting to come on board, with the latter and large-scale deployments not being far behind.

WiMax may find its niche — at least in the US — as more of the backhaul technology for wireless clouds (LTE or WiFi) is owned by the large incumbent wireless carriers.

The efforts of Sprint (S) and CLWR are all that’s kept WiMax afloat. It still looks a bit like Clearwire sold a self-serving bill of goods to Sprint, who has long been desperate for a magic bullet to solve its subscriber defection problems.

Check out the chart on the right, courtesy of Gridstone Research.

Since eloping with Sprint’s network business, Clearwire has managed revenue growth of 19% YOY, based on 2008 pro forma numbers and 2009 actuals. However, in that same span, costs have swollen by 27%. As a result operating income has dropped by 29% (from a negative number, mind you). Just the spectrum fees alone that Clearwire pays, amount to 95% of its revenue.

Wait, let me guess. They’re going to make it up on volume.

(Click to enlarge)

So besides shorting CLWR, is there any way to play this puppy? As a matter of fact, there is. No matter what happens between WiMax and the other competing technologies, cellular firms will need increasing capacity on their backhaul links. The iPhone (AAPL) and Android have seen to that. For some, fiber will come to the rescue. For others, a wireless solution is the only one that makes sense to boost backhaul bandwidth.

And the clear leader in wireless backhaul is one of my favorites, Ceragon Networks (CRNT), who coincidently just announced a new solution at the CTIA conference on March 23rd. Sure, competitor Dragonwave (DRWI) has come on strong in the last year, but they’re still too strongly tied to Clearwire, who is responsible for the lion’s share of DRWI’s business. Ceragon is more balanced, having a number of large customers – including last year’s addition of Hutchison 3.

In fact, despite the recent relative falloff in Dragonwave’s relative price, the pair trade of long CRNT and short DRWI may still have legs.

Either way, marrying Clearwire to Sprint is like a perfect storm. A technology with limited utility serving as the foundation for a network with limited subscribers.

Disclosure: No positions

Source: Clearwire Forecast Is Foggy, Then Stormy: Pair Trades to Help Weather It