Almost nobody ever seems to be happy enough about faster broadband. If more bandwidth is available, people will complain about the price. If the price is lower, people will complain about the terms and conditions of service. Nevertheless, service providers continue to plow billions into network upgrades, year in and year out. The latest example is Sprint Nextel’s big new investment in Clearwire, on the heels of a $7.4 billion investment last year.
Sprint Nextel Corp. plans to invest $1.18 billion more into Clearwire Corp., of a total new cash infusion of $1.564 billion in equity financing from its investors.
Overland Park-based Sprint, which owns 51 percent of Clearwire, is making the lion’s share of the investment. The other investors include Comcast Corp., Time Warner Cable, Intel, Eagle River Holdings and Bright House Networks.
Google, one of the initial investors in Clearwire, is not part of this equity financing round, most of which is expected to close in the fourth quarter.
The announcement comes the day after Sprint said it plans to lay off as many as 2,500 employees by year’s end, part of an effort to trim annual costs by at least $350 million.
Sprint, the nation’s third-largest wireless carrier, and a group of strategic investors backed Clearwire in a $14.5 billion deal late last year to hasten the rollout of 4G service, which offers ultrafast mobile broadband access using WiMAX technology. Sprint handed over its spectrum and WiMAX-related assets in an investment valued at $7.4 billion. Clearwire’s contribution was valued at about $3.9 billion. The other partners put in $3.2 billion in cash.
In addition to Sprint's $1.18 billion, the new investment will include contributions from Comcast of $196 million; Time Warner Cable, $103 million; Intel, $50 million; Eagle River, $20 million; and Bright House Networks, $19 million.
Clearwire expects to reach 80 markets by the end of 2010, covering 120 million people.
Separately, Verizon Wireless plans to launch its 4G "Long Term Evolution" network in 2010 in as many as 30 markets and have nearly nationwide coverage by the end of 2013.
Gary Kim is a contributing editor for MobilityTechzone. To read more of Gary’s articles, please visit his columnist page.
Edited by Kelly McGuire