Cable Technology Feature Article
Will Cable Companies Sell Clearwire Stake?
By Gary Kim, Contributing Editor
Now that Comcast, Time Warner Cable and Bright House Networks have sold their AWS spectrum to Verizon Wireless (News - Alert), and agreed to buy wholesale service from Verizon, one has to believe the cable companies also will sell their shares in Clearwire.
In early 2010, the public owned 10 percent of Clearwire, while Intel (11 percent) and Comcast (nine percent) are the largest holders after Sprint. Time Warner (News - Alert) owned five percent, Google three percent, Brighthouse one percent, Eagle River four percent.
Google originally had a three-percent stake in Clearwire in 2009, but Google decided not to participate in additional funding rounds. Intel decided early in 2011 to sell its own stake in Clearwire.
Other changes might occur as well. Sprint’s (News - Alert) deal with Clearwire involves payment of a flat fee to Clearwire for all use of the Clearwire 4G network through 2013. In principle, that would allow Sprint much greater flexibility to offer “unlimited use” features for 4G service, though having just eliminated such service for tethering and mobile broadband plans, Sprint will have to think carefully about how to launch any such services, especially if Sprint believes a significant number of customers will sign up.
Also, Sprint already has said it will not sell WiMAX (News - Alert) air interface devices after 2012, meaning Sprint might have to transition some significant number of WiMAX 4G users to LTE. Presumably Sprint now reckons it can use its own LTE network, plus those of potential additional suppliers, including Clearwire, Dish Network or LightSquared (News - Alert).
Sprint, which has agreed to pay up to $1.6 billion to struggling wholesale wireless provider Clearwire over the next four years, also give Sprint with unlimited access to Clearwire’s WiMAX network. Under the terms of the agreements, Sprint will pay Clearwire a total of $926 million, approximately two thirds of which will be paid in 2012, for unlimited 4G WiMAX retail services during 2012 and 2013, subject to certain conditions.
Gary Kim is a contributing editor for TMCnet. To read more of Gary’s articles, please visit his columnist page.
Edited by Juliana Kenny