Score One More for WiMAX - Clearwire Secures Additional Funding

[Jeff Thompson]

The WSJ’s Jeffrey McCracken and Don Clark reported yesterday that Clearwire has secured an additional $1.5 billion in financing to build out its nationwide WiMAX network.

The article noted, “Sprint would invest $1 billion and its Clearwire joint venture partners, a group which includes Comcast Corp., Intel Corp, Time Warner Cable Inc. and Bright House Networks LLC, would kick in another $500 million.”

I find this announcement extremely interesting – and at the same time, not very surprising. It’s interesting because it underscores the value of having an efficient, nationwide, high-speed wireless network that can handle the ever increasing demand for data that’s happening today. Just by looking at the venture partners, one can quickly see how a network of this magnitude is key to numerous business models. I commend these companies for continuing to back the commitment they started.

However, I find the news not surprising because we at Towerstream know how difficult it is to build out a network in major cities. Dense wireless network coverage of this magnitude doesn’t just pop up over night. There are many logistical challenges involved that can be costly if not done properly – and sometimes even when done properly.

Towerstream’s business model from day one has been not to rush into every major market but rather to be selective and strategic in the cities we service. Our engineers spend a lot of time evaluating each city, its buildings, its challenges, etc. We only begin to roll-out a network after deciding we can make it profitable for Towerstream.

This has proven to be an extremely successful model and, in fact, last week we announced that Towerstream has reached EBITDA profitability in Seattle, making it the eighth of our nine markets to reach this milestone.

We also announced Q309 earnings last week, which included our highest number of customer installations. We continue to feel Towerstream moves in an extremely positive direction quarter-over-quarter and are genuinely excited about the days and weeks ahead as well as the overall direction of our company.

I am curious to hear other thoughts and perspectives on Clearwire’s latest funding round? Do you think another $1.5 billion will be enough?

[Jeff Thompson]

Hi Alan,

Yes, I did see your commentary on the Clearwire rumors and enjoyed reading it. I am sure we will both be closely monitoring the situation as it continues to unfold.

Thanks,

Jeff

[Alan J Weissberger]

Jeff, My report and opinion on Clearwire's funding were posted on 360 one day before this post of yours.

http://www.wimax360.com/profiles/blogs/sprint-partners-to-pump-15

. Did you not read it?

http://www.wimax360.com/profiles/blogs/sprint-partners-to-pump-15