The new Clearwire Corp. may face serious financial hurdles as it pursues a nationwide buildout of mobile WiMAX, and may have to scale back its plans if financing is not as robust as envisioned.
Clearwire solidified its merger with Sprint's Xohm WiMAX business unit earlier this fall and has $3.2 billion in investments in place from the likes of Intel, Google, Comcast, Time Warner, Bright House Networks and Trilogy Equity Partners. The initial buildout will be in markets where Clearwire had offered services before the merger with Sprint, and then to other cities as well. Currently Baltimore is only the city offering mobile WiMAX, but Portland will follow in January and other cities, such as Atlanta, Boston and Chicago, are set to launch next year.
But the rollout will be expensive. If credit markets continue to be weak, Clearwire might either have to get more financing from its equity partners that helped launch the new Clearwire or 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," Clearwire CEO Ben 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."
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