Clearwire Casts $1B into WiMAX

March 20, 2006

Recently announced in Red Herring.com, Clearwire - a so called 'start-up' - is looking to invest about $1 billion in funds to build its own WiMAX network, and plans to offer wireless broadband service over wide areas. Specifically, Clearwire is anxious to acquire spectrum and build new markets, Chief Strategy Officer Ben Wolff told RedHerring.com.

Clearwire is definitely a new firm, but with a solid history. Clearwire was founded in October 2003 by Craig McCaw, the cellular phone pioneer who sold McCaw Cellular Communications to AT&T in 1994 for more than $11 billion.

With the new capital available, Clearwire may start to compete with incumbents like Comcast and AT&T in the growing high-speed broadband Internet market. More specifically, the company could partner with satellite-TV companies who want to offer a bundle of video, voice, and data in their quest to compete with the cable and telephone companies.

Speculation on the potential pairing grew earlier this year after News Corp. Chairman Rupert Murdoch said his DirecTV company was looking for a way to enter the wireless broadband market. Clearwire was considered a leading candidate to help.

“What we like about our business plan and technology is there are a number of parties we could partner with,” said Mr. Wolff, declining to say whether the company is negotiating with DirecTV. Clearwire could even partner with wired and wireless phone companies as well, he mused.

"Building up a network like ours is very similar to building up a cellular network,” said Mr. Wolff, who is also co-president. Clearwire currently offers service in more than 200 cities and towns in the United States, Ireland, Belgium, Denmark, and Mexico. In the U.S. the company operates under the licensed 2.5 GHz band in places like Jacksonville, Florida; Modesto; California; and Bellingham, Washington.

Clearwire deploys an early, nonstandard version of WiMAX. The equipment for its network comes from its wholly owned subsidiary NextNet Wireless.

The service is considered fixed because phones or other mobile devices that work with the technology are not yet available. Nevertheless, Clearwire’s service can transmit voice and data at speeds comparable to DSL and cable. And because it is wireless, there is no need for fiber-optic cables or copper wires.

Currently the speed of the connection is up to 1.5 Mbit/second. The company charges $30 to $37 a month for the service and $5 for the modem, to a rather small number of customers.

Read the entire article at Redherring.com.