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Clearwire (CLWR)
Clearwire and Sprint Considering Nationwide Wireless Network
Clearwire and Sprint (S: Charts, News, Offers) are both companies which haven't been doing so well in the recent past. Both focus on wireless communication networks, Sprint as a major cellular phone network, and Clearwire as a distributor of broadband internet services. The two companies have long considered working together on a nationwide wireless network. Late last night, news was announced that the two companies are getting closer to working out an arrangement for a new wireless company, and some other major companies are getting involved as well. Is this arrangement heading for success, or will these talks fall through as they have so many times before?
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| Stock Analysis |
Although Sprint and Clearwire haven't been able to come to an agreeable decision in the past, at the present moment they are both working together towards the goal of creating a nationwide wireless network. This network would use something called WiMax technology, which is used by both companies for cell phones, laptops, and any mobile devices. Their goal would be to create a new company, which Sprint and Clearwire would co-operate. This network could then be used to provide a wide variety of wireless services to users across the nation. One of the major obstacles to getting this company started, is that it would require significant financial investments - Sprint has estimated that this project would take at least $5 billion to complete.
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And that's where these other major companies are getting involved. Time Warner Cable (TWC: Charts, News, Offers) and Comcast Corp (CMCS.A: Charts, News, Offers) are seriously considering providing funding for this project. Of the $3 billion that the companies are currently trying to raise, Comcast is considering funding $1 billion, and Time Warner is considering adding $500 million. Many other major companies are not quite as far along in discussion, but are also considering becoming a significant financial resource for this project; Intel (INTC: Charts, News, Offers) and Google (GOOG: Charts, News, Offers) are both reportedly considering agreements in the range of a couple hundred million up to a billion dollars.
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Although plans for this network and similar projects have been in discussion for many months, it seems like now the companies are pushing to get this settled quickly. It is likely that the companies will quickly try to come to a conclusion, either finalizing plans, or maybe deciding once again not to move forward. The CEO of Sprint has indicated that he would like to have the plans finalized by next week; partly so they could make the announcement at the wireless trade show coming up in Las Vegas, but also simply so they can get a head start on any competition. AT&T (T: Charts, News, Offers) and Verizon (VZ: Charts, News, Offers) certainly have the capacity to work on a similar project, and could be fierce competitors for a company created by Clearwire and Sprint. It isn't clear yet whether this project will indeed become reality, but if it does, it could likely be a boost for two companies that severely need it.
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