First International Telecom (Fitel), a WiMAX licensee in Taiwan, announced it plans to ask Clearwire and Sprint Nextel along with other target investors to invest in Fitel as strategic partners in its WiMAX service operation. Fitel will make presentations of its WiMAX operation plans to target investors, including Clearwire and Sprint Nextel, beginning next week, announced Fitel chairman Ming-jen Chien at the press conference. Fitel is looking to raise an extra $73 million to $104 million to increase its paid-in capital from the current amount of $109 million to build a WiMAX network, Chien said.
For sure, Taiwan is an important market for both Sprint Nextel and Clearwire, who want to see as many consumer electronics companies as possible put WiMAX chips in their products. But Sprint is struggling at home with a falling profit. The company announced second-quarter profits plunged 95 percent. Sprint said it spent $51 million on its WiMAX network during the second quarter. Severance costs along with merger and integration expenses also hurt the company's profitability. Severance costs more than doubled to $85 million while merger and acquisition costs nearly quadrupled to $122 million. Clearwire isn't in much better shape. The company's stock took a hit last week after reporting second-quarter earnings that saw the WiMAX operator spending more in the quarter to add subscribers, resulting in downgrades from analysts.
To read more about Fitel's quest for funds from Sprint Nextel and Clearwire:
- check out this article from DigiTimes
- read what analysts had to say about Clearwire's results here