It's been a rough few weeks for Clearwire (NASDAQ:CLWR).
In January, it was revealed that the company's quest to sell off some of its spectrum to fund its WiMAX rollout fizzled as large operators dropped out of the auction. Last week wasn't so rosy either as Time Warner Cable revealed that the company's wireless business--which resells Clearwire's mobile WiMAX service--has produced "not very impressive and pretty inconclusive" results. The company said it has 15,000 WiMAX subscribers.
Clearwire issued a debt offering of $1.3 billion in December and is searching for other funding options, including the sale of its vast spectrum holdings and equity financing, as it tries to continue its network buildout. It has indicated it will offer more details about its 2011 plans this month.
It was thought early on that Clearwire's primary cable partners--Comcast and Time Warner Cable--would give Clearwire a significant boost in the marketplace. Now it appears that wireless is not an integral piece of these cable operators' strategies. Moreover, it's becoming increasingly clear they will not be a source for additional equity financing down the line.
"We are basically exploring whether packaging wireless data with our wireline offerings is something that consumers want, and if there is a formula that people want, so we are trying different models, different products, what have you," TWC CEO Glenn Britt said on the company's fourth-quarter earnings conference call. "To date, I would say our results are not very impressive and pretty inconclusive. So, we are going to stick with that for a while. We are trying to spend not too much money while we are doing it."
Time Warner Cable's comments "support the notion that the bulk of their (Clearwire's) wholesale customers are coming through Sprint, and that the cable companies don't appear to be big elements," SNL Kagan analyst Ian Olgeirson recently told FierceWireless.
So that leaves T-Mobile USA as a critical player. While T-Mobile has ruled out deploying LTE for many years, it is looking to improve its spectrum position, and that may include partnering with other companies. But will it be Clearwire? While speculation runs high that a partnership between the two will come forth, I continue to hear rumblings that LightSquared may in fact be the partner of choice.
LightSquared has had some momentum this past week. It received a waiver from the FCC that will allow the company's wholesale providers to offer end users either dual-mode or terrestrial devices. And it triggered a phase in its deal with Inmarsat that will give the Harbinger Capital Partners-backed company up to 59 megahertz of terrestrial and L-Band ancillary terrestrial component (ATC) spectrum over the United States and Canada. LightSquared said the move was in response to the strong demand it is experiencing for capacity on the network. It has yet to announce any wholesale customers.
Sources say T-Mobile could make a number of arrangements with LightSquared, including being an anchor tenant on the network in exchange for use of its towers so that LightSquared can meet its aggressive rollout deadlines.
At any rate, T-Mobile's support of either company would be a major boost for both, although the situation looks more desperate for Clearwire. I have to think that T-Mobile is enjoying the position it's in, and could very well score a pretty sweet deal.--Lynnette