Clearwire Closes Wi-Max Deal
Gets $3.2 Billion Investment From Cable
By Mike Farrell -- Multichannel News, 12/1/2008 5:08:00 AM
Clearwire closed its long-awaited deal with Sprint Nextel, Google, Intel and three cable operators Friday, armed with $3.2 billion in cash to begin construction of its nationwide Wi-max network.
The deal, first announced in May, would allow Clearwire to combine its wireless network with Sprint’s and use the $3.2 billion in cash from Google, Intel, Comcast, Time Warner Cable and Bright House Networks to build out a fourth generation Wi-Max network across the country over the next few years.
On a conference call with analysts on Monday, Clearwire CEO Ben Wolff (left) said that there were no material changes to the deal as it was first announced. He said Clearwire has already received the cash from its five partners and that the investment was initially valued at $20 per share of Clearwire stock. That will be readjusted within the next 90 days to between $17 per share and $23 per share, depending on the average price of Clearwire shares at the time.
“In no event will the price be lower than $17 per share or higher than $23 per share,” Wolff said on the conference call.
Wolff said that each of the cable operators is expected to become significant wholesale customers of Clearwire. He added that Clearwire already is using an existing mobile Wi-Max network in the Baltimore area and plans to launch full commercial service in Portland, Ore. next year.
Once the nationwide Wi-Max network is built, it is expected that the cable operators will offer service under their own brands. The relationship with Clearwire will strictly be wholesale, with the cable operators in control of pricing and the roll-out of their respective product.
Clearwire stock was priced at $7.21 per share, up 50 cents each, in late morning trading.
Wolff also unveiled the new name of Clearwire’s 4G mobile service—Clear—and its new tagline, “Let’s Be Clear.”
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