On the back of widening quarterly losses, US wireless internet service provider Clearwire has made a dramatic about-turn, announcing it will test LTE technology.
Since its inception, Clearwire, together with its majority partner Sprint Nextel, have been…
On the back of widening quarterly losses, US wireless internet service provider Clearwire has made a dramatic about-turn, announcing it will test LTE technology.
Since its inception, Clearwire, together with its majority partner Sprint Nextel, have been champions of LTE rival technology WiMax.
The promotion and investment in WiMax had flown in the face of the majority of telecoms operators favouring LTE for 4G service provision. With the proposed adoption of LTE, Clearwire and Sprint would find it easier to found a joint venture with another carrier. The company said it would test out two variations of LTE technology alongside its current WiMax build-out, and would also look at different scenarios in which both technologies would sit together. CEO Bill Morrow said that Clearwire is the only US provider that can run these concurrent technologies because of the depth of its wireless spectrum.
“We’re the only carrier in the nation with the spectrum to conduct tests of this nature,” he said, adding that the company had not yet made a decision on whether it would switch technologies. Clearwire announced losses of US$125.9m, an improvement on the previous year’s losses of US$73.4m. Clearwire, whose subscriber numbers have tripled from a year earlier to 1.7m, said it expects the network eventually to cover 270 million people in the US. Some analysts say that Clearwire’s poor performance has angered its ultimate paymasters, Sprint. This issue of backing a losing horse will come to a head by the end of the year, when Clearwire is due another US$1bn of funding from Sprint on top of This follows a US$1.2bn investment in 2009 and analysts say Clearwire will need at least US$4.5bn more in financing before it begins generating its own cash in 2014. It might just be more cost-effective for Sprint to buy-out the remaining 49% of the equity held by Comcast, Time Warner, Intel, Google, Bright House Networks and the firm’s original shareholders.
