Clearwire Corp., eager to maintain its 4G edge against rivals in the United States, has raised $291 million from stockholders to keep building its next-gen wireless network.
Shares of the WiMAX service provider closed almost 6 percent higher on Wednesday, at $7.81, following the news.
Clearwire had hoped to generate up to $361 million in the rights offering. Investors, though, ended up buying 39.7 million shares of class A stock for a total of $290.8 million. The activity comes almost a year after Sprint Nextel Corp., Clearwire’s majority shareholder and wireless partner, pumped another $1.2 billion into the Kirkland, Wash.-based company.
Clearwire’s network reaches 51 million people. The operator aims to cover 120 million people by year’s end, far outpacing competitors AT&T Inc. and Verizon Wireless, which have yet to launch their 4G LTE services. One problem facing Clearwire, however, is that LTE appears to be the standard of choice for carriers, to whom it can wholesale, much as VHS and MP3 dominated BetaMax and mini-discs. But Clearwire isn’t worried. The debate “pitting one wireless standard against another is misplaced,” spokeswoman Susan Johnston told VON/xchange two weeks ago.
“Since WiMAX and LTE share about 75 percent of the same DNA, we have the flexibility to add LTE if it was the right thing to do for the business, but today we are focused on building out our WiMAX network in 2010 as planned,” Johnston explained. “Even more fundamental to the discussion is our unmatched spectrum for mobile broadband. Independent of 4G radio technology, it is this spectrum that gives us the potential to deliver more bandwidth than the competition.”
At least one expert also doesn’t appear too worried about the future of WiMAX as compared to LTE. Richard Webb, Infonetics’ directing analyst for WiMAX, said recently that he expects “generally healthy growth” through the rest of 2010. And the defections of major operators like Russian carrier Yota have not changed Webb’s view. Yota is just one WiMAX provider out of about 600. “It is not yet certain whether this is the thin end of a wedge for WiMAX,” said Webb.