Intel: Clearwire has sufficient capital
An Intel executive said Wednesday that the company did not need to boost Clearwire financially because it has sufficient capital. "They've got enough money to keep going for quite a while," said Sean Maloney, Intel's chief sales and marketing officer, in a conference call. "They've got a pretty fat piece of capital to go out and build the network."
Clearwire has only launched in two markets--Baltimore and Portland, Ore.--and while it has been rumored that the company will launch mobile WiMAX operations in other cities across the United States, its buildout plans have so far been opaque. Clearwire CEO Ben Wolff has said publicly that the company needs an additional $2 billion in capital over the next few years to meet its aggressive buildout plans.
The company, which is 51 percent owned by Sprint Nextel, received $3.2 billion in capital from Intel, Google, Comcast and others and merged with Sprint's WiMAX assets at the end of 2008. Intel and Google, among others, have taken large write-downs because of the investment.
Amid tight credit markets and the economic recession, getting additional capital for a young company could prove difficult. "Obviously, the economic environment globally is tough for anyone building out new stuff," Maloney said, though he also said that "the current build-out rate for Clearwire is pretty fast."
In December, Wolff conceded that if enough capital could not be raised, the company might have to scale back its plans. "There is a scenario in which we'd build a little more slowly and you'd never need any more capital," Wolff said in an interview with The Wall Street Journal. "Or we could be more aggressive and we'd have to look to acquire more debt or equity in either late 2009 or early 2010."
Maloney also pointed out that WiMAX has seen success outside the United States. He said Japan will roll out WiMAX throughout the country by 2012 and also spoke about the technology's availability in Moscow and St. Petersburg, Russia from high-speed Internet provider Scartel.
"We're very aware that 80 percent of the technology market is overseas, and part of the purpose of this call is to remind people of that," Maloney said.
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