Clearwire gets $900M, drops IPO plans

How do you ensure that the second largest 2.5 GHz spectrum holder in the U.S. will definitely deploy standardized WiMAX? Throw a lot of money at the company. Clearwire, run by cellular mogul Craig McCaw, is dropping its IPO plans after securing $900 million in a round of financing led by Intel Capital. Intel Capital itself will pump $600 million into the company--its single biggest investment ever. Motorola, which is also investing in Clearwire, is buying Clearwire's NextNet Wireless subsidiary, which has been supplying Clearwire with proprietary WiMAX-like technology in the 27 or so markets the operator has launched.

The WiMAX camp desperately needed a bigger gun like Clearwire to actually deploy the 802.16e-2005 standard in the U.S. Sprint Nextel is still deciding on a technology. Based on its comments in its IPO filing in May, Clearwire was hedging on moving to WiMAX, but if it didn't it faced a penalty from its major investor, Intel, which invested $20 million in the company in 2004. Intel could have forced Clearwire to buy back up to 5 million shares at $2 apiece if it didn't start using WiMAX certified equipment in new markets six months after the equipment become available or if it didn't start deploying at least as many WiMAX base stations as the number of NextNet base stations in 12 months. Meanwhile, the IPO prospects for Clearwire didn't look that great given the fact that it has around 20,000 subscribers and was far from profitable.

To read more about Clearwire's $900 million payday:
- check out this press release

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