Kajeet and Clearwire Announce Wholesale 4G Agreement
• Clearwire's 4G Mobile Broadband Network to Power Kajeet Wireless Internet Service for Kids and Educators
• Companies Expect to Extend Relationship to LTE Services in the Future
BELLEVUE, Wash. and BETHESDA, Md. – December 6, 2012 – Clearwire Corporation (NASDAQ: CLWR), a leading provider of 4G mobile broadband services in the U.S., and Kajeet, Inc., the only pay-as-you-go cell phone service that puts kids first, today announced a wholesale agreement that will enable Kajeet to offer mobile broadband service directly marketed to kids using Clearwire's 4G network.
"Clearwire's wireless broadband network provides our wholesale partners with a compelling opportunity to enter the rapidly expanding 4G market that would be impossible for many of them to enter independently," said Don Stroberg, SVP of strategic partnerships and wholesale at Clearwire. "Kajeet's expansion of its product portfolio to offer 4G services to their targeted youth and education segments further extends the reach of mobile broadband services to two key market groups. We're thrilled to continue building momentum for our wholesale 4G business as the premier wholesale provider of 4G capacity to carriers, ISPs and other service providers in the U.S."
Kajeet's 4G service will help keep young people connected to friends, family, school and the other social, educational and community services that they engage with every day. Products focused on the youth market will also give parents the tools necessary to oversee their children's Internet use and open new opportunities for educators to bring wireless into the classroom.
"Children can benefit tremendously from new and thoughtfully designed opportunities to stay connected to the people and institutions that help guide their individual development every day," said Daniel Neal, CEO & Founder of Kajeet. "Adding a 4G mobile broadband product with Clearwire gives our customers new connectivity options and allows Kajeet to expand our mobile service offerings so that we continue to lead in the creation and delivery of mobile solutions that are great for kids, families and educators."
Clearwire is constructing a next-generation 4G LTE Advanced-ready network to address the mobile broadband capacity needs of wholesale customers in urban markets where demand for wireless data is high. As Clearwire's LTE network comes online, Kajeet and Clearwire expect to extend their agreement to offer users even faster speeds.
Clearwire Corporation (Nasdaq:CLWR), through its operating subsidiaries, is a leading provider of 4G wireless broadband services offering services in areas of the U.S. where more than 130 million people live. The company holds the deepest portfolio of wireless spectrum available for data services in the U.S. Clearwire serves retail customers through its own CLEAR® brand, as well as through wholesale relationships with some of the leading companies in the retail, technology and telecommunications industries. The company is constructing a next-generation 4G LTE Advanced-ready network to address the capacity needs of the market, and is also working closely with the Global TDD-LTE Initiative and China Mobile to further the TDD-LTE ecosystem. Clearwire is headquartered in Bellevue, Wash. Additional information is available at http://www.clearwire.com.
Kajeet is the preeminent wireless service platform for kids and those who love them. Founded in 2003, Kajeet is the creator of the award-winning smart phone for kids™ and Sentinel™, a Global Mobile Award nominee. Kajeet makes products and services that enable mobile communication, education and entertainment at home and at school safe, secure and affordable. For more information, please visit us at http://www.kajeet.com or http://www.kajeet.com/education.
This release, and other written and oral statements made by Clearwire from time to time, contain forward-looking statements which are based on management's current expectations and beliefs, as well as on a number of assumptions concerning future events made with information that is currently available. Forward-looking statements may include, without limitation, management's expectations regarding future financial and operating performance and financial condition; proposed transactions; network development and market launch plans; strategic plans and objectives; industry conditions; the strength of the balance sheet; and liquidity and financing needs. The words "will," "would," "may," "should," "estimate," "project," "forecast," "intend," "expect," "believe," "target," "designed," "plan" and similar expressions are intended to identify forward-looking statements. Readers are cautioned not to put undue reliance on such forward-looking statements, which are not a guarantee of performance and are subject to a number of uncertainties and other factors, many of which are outside of Clearwire's control, which could cause actual results to differ materially and adversely from such statements. Some factors that could cause actual results to differ are:
• We have a history of operating losses and we expect to continue to realize significant net losses for the foreseeable future.
• Our business has become increasingly dependent on our wholesale partners, and Sprint in particular. If we do not receive the amount of revenues we expect from existing wholesale partners or if we are unable to enter into new agreements with additional wholesale partners for significant new wholesale commitments in a timely manner, our business prospects, results of operations and financial condition could be adversely affected, or we could be forced to consider all available alternatives.
• Sprint owns just less than a majority of our common shares, is our largest shareholder, and may have, or may develop in the future, interests that may diverge from other stockholders.
• If our business fails to perform as we expect, if our assumptions underlying our cash projections prove to be inaccurate, or if we incur unforeseen expenses in the near term, we may require additional capital to fund our current business. Also, we will need substantial additional capital to fund our business and meet our financial obligations beyond the next 12 months. Such additional capital may not be available on acceptable terms or at all. If we fail to obtain additional capital, our business prospects, financial condition and results of operations will likely be materially and adversely affected, and we will be forced to consider all available alternatives.
• Our current plans and projections are based on a number of assumptions about our future performance, which may prove to be inaccurate, such as our ability to substantially expand our wholesale business and the expected timing and costs of deploying LTE on our wireless broadband network.
• We regularly evaluate our plans, and we may elect to pursue new or alternative strategies which we believe would be beneficial to our business, including among other things, expanding our network coverage to new markets, augmenting our network coverage in existing markets, changing our sales and marketing strategy and/or acquiring additional spectrum. Such modifications to our plans could significantly change our capital requirements.
• We plan to deploy LTE on our wireless broadband network, alongside mobile WiMAX, and we will incur significant costs to deploy such technology. Additionally, LTE technology, or other alternative technologies that we may consider, may not perform as we expect on our network and deploying such technologies would result in additional risks to the company, including uncertainty regarding our ability to successfully add a new technology to our current network and to operate dual technology networks without disruptions to customer service, as well as our ability to generate new wholesale customers for the new network.
• We currently depend on our commercial partners to develop and deliver the equipment for our legacy and mobile WiMAX networks, and will be dependent on commercial partners to deliver equipment and devices for our planned LTE network as well.
• Many of our competitors for our retail business are better established and have significantly greater resources, and may subsidize their competitive offerings with other products and services.
• Our substantial indebtedness and restrictive debt covenants could limit our financing options and liquidity position and may limit our ability to grow our business.
• Future sales of large blocks of our common stock may adversely impact our stock price.
For a more detailed description of the factors that could cause such a difference, please refer to Clearwire's filings with the Securities and Exchange Commission, including the information under the heading "Risk Factors" in our Annual Report on Form 10-K filed on February 16, 2012, and subsequent Form 10-Q filings. Clearwire assumes no obligation to update or supplement such forward-looking statements.
Susan Johnston, 425-505-6178
JLM Partners for Clearwire