Clearwire still pursuing spectrum sale, equity financing

Clearwire (NASDAQ:CLWR) is still considering a sale of some of its spectrum as well as new equity financing, and hopes to have one or both of those funding issues resolved in either the fourth quarter of this year or the first quarter of next year, the company's CFO said.

Speaking at the JPMorgan SMid Cap Conference Friday, Clearwire CFO Erik Prusch said the company had hoped to complete debt financing at the same time as a spectrum sale and new equity financing. However, he said the debt market was "hot" and that the company had to "pull the trigger" on its recently announced debt offering. Clearwire announced yesterday a debt offering of $1.33 billion. Clearwire could raise an additional $760 million if Sprint Nextel (NYSE:S), which holds a 54 percent stake in Clearwire, decides to buy covertible bonds, something it has not yet committed to do.

"This definitely relieves one of the pressure points, which is the liquidity in the near term," Prusch said. However, he cautioned that Clearwire still needs additional financing to continue aggressively building out its mobile WiMAX network; the company expects to cover 120 million POPs by year-end.

With regard to a possible spectrum sale, Prusch said Clearwire is exploring several different options, including selling off spectrum in regional or market-by-market chunks. He said in the top 100 markets Clearwire has 150 MHz to 160 MHz of spectrum, but said it is too early to tell how the spectrum auction process will turn out. "We'll evaluate all of that and come up with a market determination," he said.

"We have seen good interest in our spectrum portfolio," Prusch added. "And I can say we've been working very hard on equity for a while." He declined to talk about new equity partners, and cautioned there is no guarantee that Clearwire will complete a spectrum sale or attract a new equity partner.

Sprint supports a wholesale agreement between Clearwire and T-Mobile USA, according to a Goldman Sachs analyst who recently met with Sprint executives. Clearwire has held negotiations with T-Mobile, but the status of talks is not known. Representatives from Sprint, Clearwire and T-Mobile declined to comment on the report.

Interestingly, Prusch said Clearwire will announce its priorities for 2011 and its buildout plans when it reports fourth-quarter results in February. Still up in the air is Clearwire's plans for launching Clear-branded smartphones, as well as the company's dispute with Sprint over payments by Sprint to Clearwire for Sprint's WiMAX-capable smartphones.

For more:
- see this JPMorgan webcast
- see this Reuters article

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