Report: Sprint funding Clearwire buildout
Sprint Nextel Corp., the third- largest U.S. wireless carrier, plans to invest more to help Clearwire Corp. finish its network expansion on time, according to two people familiar with the matter.
The size of the investment hasn't been determined, said one of the people, who declined to be identified because the negotiations aren't public. Investors such as Philadelphia-based Comcast Corp. also plan to put more money into the venture, according to one of the people.
Clearwire has said it needs about $2 billion more to expand its network to reach up to 120 million people in the U.S. by the end of 2010. Sprint Chief Executive Officer Dan Hesse has said he would be willing to put in as much as 51 percent of that. Sprint will use the mobile network, powered by WiMax technology, to offer faster wireless Internet access, helping the carrier compete with larger rivals Verizon Wireless and AT&T Inc.
The Wall Street Journal reported the investments yesterday, pegging them at $1.5 billion. Sprint spokesman James Fisher and Clearwire spokeswoman Susan Johnston declined to comment, as did Comcast spokesman John Demming.
Clearwire, based in Kirkland, Washington, probably will provide investors with details upon releasing third-quarter results Nov. 10, one of the people said. Last month, Sprint reported a wider third-quarter loss of $478 million after paying more to subsidize phones. The carrier has lost more than 2 million customers in the year through September.
Sprint, based in Overland Park, Kansas, advanced 2 cents to $2.85 in New York Stock Exchange composite trading Nov. 6 and had risen 56 percent this year before today. Clearwire rose 1 cent to $6.50 in Nasdaq Stock Market trading. The stock has risen 32 percent this year before today.
Buildout Delay?
Clearwire combined operations with Sprint's WiMax assets last year as part of an effort to focus on more advanced wireless service. The company got a $3.2 billion investment from Comcast, Google Inc., Intel Corp., Time Warner Cable Inc. and others.
Clearwire CEO Bill Morrow has said the company needs to secure financing or delay the buildout. The company plans to spend as much as $1.9 billion this year as it expands the network, and will start offering service in Dallas, Chicago, Honolulu and other parts of the country this quarter.
Verizon Wireless, the largest U.S. mobile-phone company, also is upgrading its networks to a more advanced wireless standard, known as Long-Term Evolution. The Basking Ridge, New Jersey-based carrier expects to introduce the service in some markets by mid-2010.
Sprint, Verizon and Dallas-based AT&T are overhauling their systems as more customers seek handsets that can surf the Web and download video, services that use more bandwidth than voice calls. Makers of those so-called smart phones shipped a record 43.3 million last quarter, according to Framingham, Massachusetts-based researcher IDC.