Wireless service provider Clearwire Corp. shares increased well over 1 percent after company officials raised the possibility that it soon might raise more money, according to a Reuters report.
Clearwire, which is 54-percent owned by Sprint Nextel, must raise billions of dollars to complete a high-speed wireless network and help it compete with bigger rivals such as Verizon Wireless. Clearwire officials said board member Ben Wolff is acting as a strategic adviser.
The company’s chairman and founder, Craig McCaw, stepped down last week; Clearwire gave no reason for McCaw’s departure but said it was not due to “any disagreements with the company on any matters relating to its operations, policies, or practices,” Reuters said. Wolff replaced McCaw as a Clearwire director on Jan. 6.
“Wolff has also been hired as adviser and would get a fee if Clearwire enters any transactions on which he advised, Clearwire said in a document filed with the U.S. Securities and Exchange Commission on Tuesday,” the report said.
In its most recent earnings report, Clearwire said it saw an increase in subscribers, ending the third quarter with 2.84 million total subscribers, consisting of 1.01 million retail subscribers and 1.83 million wholesale subscribers.
“This quarter we saw continued strong demand for the nation’s first 4G mobile broadband service, which drove a record 1.23 million new subscribers for an ending third quarter subscriber base in excess of 2.84 million. Due to this phenomenal growth, we now believe we will end this year in excess of 4 million total subscribers, nearly doubling our original 2010 expectation of just over 2 million,” said Bill Morrow, Clearwire’s CEO.
According to Reuters, investors see the agreement with Wolff “as a sign that the company has new funding in its sights,” said Mizuho Securities analyst Michael Nelson.
“I think Wolff took the assignment thinking he had a high likelihood of making the deal,” Nelson told Reuters.
Industry expert Carl Ford recently took a gander at Clearwire’s future on TechZone360, saying that Clearwire has more spectrum in it than any other carrier and would be a great target for all the players.
“The case for Clearwire can be made as an alternate delivery for fixed wireless and from that perspective that Google has ample reason to invest,” Ford said. “Clearwire could be the glue that connects up their adventures in SuperWiFi / White Space including the use of their spectrum database to support wholesale services.”
Sprint uses Clearwire’s network to operate its high-speed wireless service. T-Mobile USA, a unit of Deutsche Telekom, has said it needs more airwaves.
Clearwire shares were up 10 cents, or 1.74 percent, at $5.86 in morning trading on NASDAQ.
Executive Editor, Strategic Initiatives