Having laid off the majority of its employees and operating on a skeleton crew, Open Range Communications is now putting itself up for sale, according to a person familiar with the company's plans. Further, Reuters reported Open Range filed for Chapter 11 bankruptcy. The company listed total assets of $114 million and total liabilities of $110 million as of Sept. 30.
An Open Range spokesman declined to comment.
Privately held Open Range operates a WiMAX network in more than 140 markets spanning more than a dozen states. Earlier this year, the company said it counted more than 20,000 subscribers, according to the Denver Business Journal.
KeyOn Communications, Towerstream and possibly even LightSquared or Clearwire (NASDAQ:CLWR) could be interested in purchasing Open Range, though these companies generally declined to comment on the topic.
However, a possible sale of Open Range is hampered by a number of factors. First, WiMAX is a fading technology. Even WiMAX stalwart Clearwire plans to transition to the more widely adopted LTE technology. Thus, Open Range's base stations and network assets might not be worth much.
Second, Open Range leases the spectrum it uses for its network from Globalstar, and the FCC last year threatened to suspend Globalstar's spectrum licenses because Globalstar wasn't complying with the commission's rules on Ancillary Terrestrial Component technology. Though Open Range gained a temporary reprieve on the suspension, Open Range inked a deal with LightSquared whereby it planned to transfer its business onto LightSquared's planned network.
LightSquared, though, has been hampered in its own attempts to build out an LTE network by concerns over the interference its network could cause on GPS receivers. It's unclear whether LightSquared's troubles forced Open Range to shut down its operations; according to the Denver Business Journal, Open Range has declined to discuss the topic.
Thus, the clouds surrounding Open Range's spectrum situation could further impede a possible sale.
Open Range Wednesday said it will eliminate around 122 positions, leaving around 48 workers. Essentially, the company is jettisoning all positions in its markets outside of its headquarters in Greenwood Village, Colo. The company also said will stop accepting new customers, though it will continue providing service to existing customers. Further, the company's CEO, Bill Beans, resigned, and the company's CFO, Chris Edwards, appears to be heading the company now.
And what of the affect on Open Range's suppliers? Open Range was previously network equipment supplier Alvarion's largest former customer, but no longer. "We were not surprised by Open Range's bankruptcy filing. Alvarion's business plan for 2011-12 did not include Open Range," the company said in a statement reported by Globes. "We have made no shipments to it in the past few quarters, and effectively stopped working with it in late 2010."
For more:
- see this Reuters article
- see this Globes article
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Article updated Oct. 6 with information on Open Range's bankruptcy filing and relationship with Alvarion.