Clearwire's last resort has come

Lynnette LunaClearwire (NASDAQ:CLWR) is reportedly aiming to sell some of its vast spectrum holdings to raise between $2.5 billion and $5 billion, according to a recent Bloomberg report. Despite having big-name backers such as Sprint Nextel (NYSE:S)--which owns 54 percent of the company--as well as Comcast, Intel and Time Warner, it appears that none of them wants to plug additional money into the operator.

Indeed, tensions have recently increased over the strategic direction of the company, according to published reports. And Clearwire has slowed or delayed launches in some markets.

However, the WiMAX operator early this morning announced commercial WiMAX will finally light up in the big markets of New York City Nov. 1, in Los Angeles Dec. 1 and in San Francisco in late December.

Still, selling off spectrum may be the best way for Clearwire to raise the funds it needs to complete its rollout without raising any additional capital. Moreover, it will gain some independence from Sprint by reducing its funding gap. Clearwire averages about 120 MHz of spectrum per market. Wells Fargo Securities analyst Jennifer Fritzsche said in a research note last week that a value of 20 cents to 40 cents per megahertz of spectrum per U.S. resident would reach the $2.5 billion to $5 billion price tag.

With operators like T-Mobile and even Sprint itself keen on securing spectrum for the next generation of services, Clearwire should be able to garner the funds it needs. Spectrum is a valuable commodity, even at 2.6 and 2.5 GHz.

But the plan isn't perfect for Clearwire. If Sprint buys a significant amount of spectrum, what incentive will it have to buy out Clearwire down the line?

I can see why selling off spectrum is seen as a last resort for Clearwire--but it appears Clearwire has hit its last resort. For many months we've heard about a possible deal between T-Mobile and Clearwire, but nothing has been officially announced. My guess is that T-Mobile has been looking to buy spectrum from the company since T-Mobile has no interest in offering WiMAX services.

Clearwire needs to sell off spectrum to help fund its operations into next year and beyond. Unfortunately, a scenario where Sprint buys a chunk of Clearwire's spectrum is a real threat--a risk that Clearwire unfortunately needs to take. --Lynnette

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