Sprint Nextel is discussing various investment scenarios for cash-strapped wireless broadband provider Clearwire with five cable operators -- Comcast, Time Warner Cable, Cox Communications, Cablevision Systems and Bright House Networks -- according to a published report.
The MSOs are in talks with Sprint, which is Clearwire's majority investor, about providing additional investment or acquiring the company, Bloomberg reported Friday citing anonymous sources. Comcast, TWC and Bright House are already investors in Clearwire and have reseller agreements for its 4G network services.
None of the parties commented on the Bloomberg report, which said the talks are preliminary and that "no deal is imminent."
Clearwire will run out of cash before the end of 2012 unless it obtains additional funding, according to Standard & Poor's. The company had $78.8 million in cash and equivalents as of June 30, 2011, compared with $1.23 billion at the end of 2010.
This month, Clearwire announced it plans to overlay Long Term Evolution (LTE) 4G technology on its existing WiMax footprint, but said the buildout would require $600 million. LTE is up to 10 times as fast as WiMax and is being more widely adopted by carriers worldwide.
On the company's second-quarter earnings call Aug. 4, executive chairman John Stanton said Clearwire was continuing to discuss "an array of strategic alternatives" with outside parties, including strategic equity investments, sale of assets and various forms of debt financing including vendor debt.
Last week Clearwire promoted chief operating officer Erik Prusch to president and CEO.
Sprint holds a 53.6% equity stake in Clearwire. Comcast owns 9.7% of Clearwire outstanding shares; TWC owns 5.1%; and Bright House holds 0.9%. Other investors include Intel, which owns 10.4% of shares, and Google, with 3.2%.
In 2005, Sprint and Comcast, TWC, Cox and Bright House formed a mobile joint venture -- later dubbed Pivot -- designed to let the MSOs sell 3G wireless services. The JV was scrapped less than three years later, with the cable companies citing inflexible pricing and packaging options, and difficulty integrating back-office systems.