Update on the Clearwire IPO: Wall St. In Search Of A WiMAX Story

| About: Sprint Corporation (S)

Since the Clearwire (CLWR) IPO, there has been a massive amount of material written on the company. Despite all the hype, I think the long term state of expectations can be summarized as:

(1) IPO was the first of several equity events (i.e. secondary or debt),

(2) No distinct technology advantage,

(3) Spectrum/subscriber strategy as in build network, get subs and sell out to a service provider (e.g. Sprint),

(4) Targeting tier 2/3 markets which by definition have higher build-out costs (more towers/pads) and lower population densities. It sounds great to say you are targeting under served markets, but one must remember they are under served for a reason. That reason is an unfavorable mix of cost/revenue potential.

(5) Clearwire represents a market (i.e. Wall Street) in search of a WiMAX story, rather then a WiMAX company in search of a public market. Credit goes to the CLWR team for realizing the market’s need for a WiMAX company.

Final observation, it was reported last week that Infonetics Research estimated the total size of the WiMAX equipment market to be only $549.2M in 2006, but would grow to $3.7B by 2010. The $3.7B is the estimated spend by service providers like Clearwire and Sprint (NYSE:S) in the US, as well as EMEA and Asia-Pac service providers on WiMAX deployments.

Full Disclosure: I do not own shares of any of the companies mentioned in this post.