Clearwire could sign 'large carrier' soon, pines for LTE iPhone

BARCELONA, Spain--Clearwire (NASDAQ:CLWR) is hunting for more wholesale customers and believes its abundance of spectrum will help it attract new ones, especially now that rival LightSquared's network launch plans have been delayed indefinitely.

"It's a valuable asset," Clearwire CEO Erik Prusch told AllThingsD about the company's spectrum. "We expect it will continue to appreciate. This is really the fuel for the business model." Indeed, Clearwire has up to 150 or 160 MHz in the top 100 markets, though its 2.5 GHz spectrum does not have as strong propagation characteristics as the 700 MHz spectrum Verizon Wireless (NYSE:VZ) and AT&T Mobility (NYSE:T) are using to deploy LTE.

Prusch declined to say if Clearwire and T-Mobile USA are in negotiations; the two firms did consider a partnership in 2010. However, he said that Clearwire could sign up another major carrier beyond Sprint Nextel (NYSE:S), its majority owner and largest wholesale customer. "I think it is quite conceivable we can continue to sign up customers," he said.

According to a research note by Credit Suisse analyst Jonathan Chaplin, Clearwire's management seems more confident about signing new wholesale customers. He cited management's preference for customer prepayments as evidence. "This makes us believe that management must be reasonably confident that they will sign a large carrier reasonably soon; if not, they would have to consider a spectrum sale more seriously," he wrote.

Chaplin also noted that it would only cost an extra $3 to $4 to add Clearwire's 2.5 GHz spectrum to a handset. "If it really doesn't cost the carriers much we don't see why AT&T and T-Mobile wouldn't sign wholesale deals with Clearwire and order 2.5 GHz capable handsets just in case they need the additional capacity," he wrote.  "Given the lead time to order handsets and then seed the base, this would seem like a sensible, low cost insurance policy."

Clearwire intends to launch 5,000 TD-LTE cell sites by June 2013, and it recently raised $1.1 billion to help fund the buildout. However, the company said last week that despite the fresh funds, which will carry it through the end of 2012, it may have to raise substantial amounts of cash after that.

Meanwhile, Clearwire thinks its move to LTE and the possible launch of an LTE version of Apple's (NASDAQ:AAPL) iPhone later this year could be a match made in heaven, according to Clearwire's Prusch. Prusch told CNET that Apple should have no problem building an LTE iPhone that would work for FDD variants of LTE--which Sprint will launch by mid-year--as well as TD-LTE. Chipsets are already being developed that will support both variants. However Prusch declined to comment on whether the iPhone would end up on Clearwire's network.

For more:
- see this AllThingsD article
- see this CNET article
- see this PC Magazine article

Related Articles:
Google will sell stake in Clearwire for $47M, takes loss on investment
Clearwire: TD-LTE network to go live in June 2013
Clearwire doubles Q4 revenue, adds 900K wholesale subs
Clearwire raises $734M for TDD-LTE network
Sprint, Clearwire ink agreements on $1.6B in funding, LTE

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