Clearwire could delay part of its TD-LTE rollout, may bid adieu to Comcast

Clearwire (NASDAQ:CLWR) might delay part of its TD-LTE deployment over the next nine months and may also be losing another investor, according to a filing with the Securities and Exchange Commission.

The SEC filing reiterated Clearwire's long-standing plan to wrap up by end-June 2013 its phase one deployment of TD-LTE sites over 5,000 existing WiMAX sites in densely populated urban areas. Sprint Nextel (NYSE:S) is Clearwire's largest wholesale customer and shareholder and plans to use Clearwire's TD-LTE network to augment its own FDD-based LTE service.

Clearwire said in its SEC filing that in addition to the 5,000 selected sites it will also "consider sites in other areas where Sprint and other current and future wholesale partners express a need for excess data capacity and where we believe we will be most likely to generate sufficient revenues."

However, the company also appeared to give itself an out in case it runs behind schedule. "Our agreements with Sprint also provide flexibility to modify the pace of our LTE deployment and remain eligible for the full amount of LTE prepayments from Sprint. As such, in order to better align our capital expenditures with the receipt of expected LTE revenues, we are currently evaluating our plans and may elect to delay a portion of our deployment schedule accordingly," said Clearwire's filing.

The company did not share details regarding where or when those delays might occur.

Clearwire says it has sufficient cash to fund its near-term liquidity needs through at least June 30, 2013. Over the long-term, the mobile broadband operator hopes to overlay 8,000 of its existing WiMAX sites with TD-LTE over 20 MHz-wide channels.

Clearwire CFO Hope Cochran recently said construction of the company's TD-LTE network will pick up significantly this quarter. The operator intends to make use of vendor financing for its LTE network buildout, and will announce its vendors next month.

Meanwhile, it appears Clearwire may see another early investor heading for the door. The company's Sept. 27 SEC filing to sell Time Warner's full 7.8 percent stake--proceeds from which will go to Time Warner rather than Clearwire--noted Comcast has exchanged all of its Clearwire Class B common stock and Class B common units into 88.5 million share of free-trading Class A shares.

"We have not received any notice from Comcast exercising their right to effect an offering," said Clearwire.

Yet while Comcast has not requested a registered offering for the stake, "it is certainly possible that they might be right behind Time Warner in the exit aisle," said Forbes.

Time Warner said the sale of its Clearwire shares is appropriate give the recent spectrum sale and commercial agreements initiated between mobile operator Verizon Wireless (NYSE:VZ) and Time Warner, Comcast and Bright House Networks. Under the terms of the companies' deals, the cable companies can become MVNOs of Verizon's service. Comcast and Time Warner stopped reselling Clearwire's mobile WiMAX service earlier this year.

Comcast's holdings represent some 6 percent of the Clearwire's outstanding Class A common stock and Class B common stock. Sprint Nextel beneficially owns some 48 percent of the outstanding voting power as of Sept. 21, said Clearwire.

Clearwire's shares dropped on Friday after the company made the SEC filing to sell off Time Warner's stake. The cable TV company is freeing itself of all 46.4 million Class A Clearwire shares it holds. Time Warner's shares were offered to Clearwire's other investors first, but with no takers the shares were put on the public market.

Time Warner invested $550 million in Clearwire in Nov. 2008. Based on Clearwire's Friday closing stock price of $1.34, Time Warner's stake has plummeted to less than $62.2 million for a $487.80 million loss on its initial investment.

For more:
- see this Clearwire filing
- see this Bloomberg Businessweek article
- see this Forbes article
- see this Wireless Week article

Related articles:
Clearwire to start major TDD-LTE network construction in Q4
Time Warner Cable to sell 7.8% stake in Clearwire
FCC approves Verizon's $3.9B AWS purchase, T-Mobile spectrum swap
Clearwire CFO: WiMAX network to generate more revenue than expected
Clearwire: Sprint's iDEN shutdown to affect 'small number' of co-located WiMAX sites
Clearwire stays on track for TDD-LTE launch, defends financial position