Clearwire CFO: Vendor financing, spectrum sales could help fund LTE buildout
Clearwire (NASDAQ:CLWR) CFO Hope Cochran said the company has a range of available options in its efforts to pay for its planned rollout of LTE-Advanced network technology, including vendor financing and a possible sale of the company's excess spectrum.
Speaking at the Goldman Sachs Communacopia Conference in New York, Cochran said vendor financing could be a "large anchor" in Clearwire's efforts to raise between $150 million and $300 million for the maintenance of its existing WiMAX network and the $600 million the company needs to begin rolling out LTE-Advanced network technology using the TDD configuration.
"They're willing and they're ready and they'd love us to buy equipment from them," Cochran said, explaining that obtaining vendor financing is contingent on Clearwire first purchasing network equipment from vendors. "I'm also working with vendors on taking an unsecured position as well."
Cochran didn't name any vendors that Clearwire could obtain financing from, but Samsung and Huawei are among the suppliers of Clearwire's WiMAX network. Clearwire also earlier this year agreed to outsource network management to Ericsson (NASDAQ:ERIC).
Interestingly, Cochran also said Clearwire would consider selling unneeded spectrum to help raise cash. Clearwire last year conducted a spectrum auction but ultimately didn't sell any of its spectrum. Cochran said that Clearwire last year instead opted to score cash through debt markets instead of selling its spectrum.
However, Cochran said Clearwire remains open to the possibility of selling its excess spectrum if such an opportunity arose.
"There is definitely an understood value in the spectrum," she said. "If people were to approach us [about purchasing spectrum], it's something that we're open to. ... It's not one of the first things I would look at, it's more of an opportunistic situation."
As for Clearwire's other funding options, Cochran said the company may consider tapping capital markets. She said the capital markets are choppy right now, so Clearwire would have to do so carefully.
During her appearance at the event, Cochran was also questioned about Clearwire's relationship to Sprint Nextel (NYSE:S), and whether Sprint could kick in funds for Clearwire's buildout. Cochran didn't provide any specific commentary about possible funding from Sprint, but noted that Clearwire continues to partner closely with Sprint. She said around 40 percent of Clearwire's WiMAX network towers are co-located on Sprint's towers, a scenario that saves Clearwire the cost of site acquisition and tower construction.
Sprint on Oct. 7 will discuss its 4G plans, and likely will provide further insight into its relationship with Clearwire, including whether Sprint plans to provide Clearwire with additional funding.
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