Clearwire Raises $920 Million More To Fund WiMax Buildout

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Clearwire announced late Tuesday that it has raised an additional $920 million in debt, giving it an infusion of $2.8 billion in new capital this quarter -- more than enough to fully fund its nationwide WiMax buildout, the company said.

Kirkland, Wash.-based Clearwire is majority-owned by Sprint Nextel with strategic investments from Comcast, Time Warner Cable, Bright House Networks, Intel and Google.

The wireless operator earlier this month raised an additional $1.564 billion from existing investors, including Comcast, TWC and Bright House. That, together with the $920 million in debt financing and a net $360 million from a separate bond offering closed Tuesday, gives it a total of $2.8 billion of capital.

Clearwire expects more than 30 million people to be covered by its 4G WiMax service in more than 25 markets by the end of 2009, and with the new financing is targeting network coverage for up to 120 million people by the end of 2010.

In addition, Clearwire CEO Bill Morrow has been appointed to the board of directors effective immediately, according to a company filing Wednesday with the Securities and Exchange Commission. Morrow's nomination was made by Comcast, Time Warner Cable, Bright House Networks, Google and Intel.

William Morrow

The financing "demonstrates our ability to access the capital markets on attractive terms and in sufficient size to meet our needs, while at the same time prudently balancing equity dilution with the cost of capital," Morrow said in a statement. "With this latest tranche of additional funding, we have not only exceeded the amount of capital that we have previously stated we needed to fully fund our business plan, but we have also secured additional capital that will allow us to expand more aggressively by covering more people, and with more capacity than we had previously planned."

Clearwire is retailing its own WiMax-based service, branded Clear, and it also is selling wholesale access to Sprint, Comcast, Time Warner Cable and Bright House.

Comcast, for example, is marketing High-Speed 2go service in a bundle with its wired broadband in Philadelphia, Atlanta and Portland, Ore. (with Chicago and Seattle next on the list). Time Warner Cable is prepped to launch its first Road Runner Mobile services via Clearwire next week in Dallas and North Carolina, followed by Hawaii, San Antonio and Austin, Texas.

As of the end September, Clearwire had 555,000 subscribers, up from 469,000 on a pro forma basis (including Sprint's 4G business) a year ago. Third quarter 2009 revenue was $68.8 million (up 13% year-to-year pro forma) while operating loss increased to $291.3 million vs. $219.3 million in the year-ago period on a pro-forma basis.

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