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Clearwire Corporation (CLWRD) Message Board

  • teampt teampt Jan 11, 2013 9:30 AM Flag

    Win-Win Scenero

    SB and Dish come to an agreement where they both get use of the spectrum and networks they need. They both share the burden of paying down Clearwire's debt. They negotiate appropriate percentages of ownership. CLWR stays an independent company and ultimately the price per share goes up. Minority shareholders are happy. The cost to borrow money goes down and everybody wins. Lawsuits go away. Bidding war is avoided.

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    • That is good thinking imo.

      Here is a sketch of how SB-Sprint plus Clearwire and DISH can benefit from each other even though the management knuckleheads naturally each wish to 'own the world':

      On joint development of networks. Costs of building networks is substantial during start-up of new services because expense is up-front before revenue builds to pay back the investment and, supposedly, fund ability to improve/grow the network and services further. That makes sharing of the build out and facilities a benefit... so long as the companies can come to terms with how they share in the resulting service capacity and new market opportunities. These are competitors until they either merge or divide up areas in which they work and compete for markets such that they don't. Thus far the ability to collaborate among US operators has been limited and conflicted. Clearwire and Sprint's relationship have been rocky but that is because the business plan was faulty in deployment and marketing plan and execution. If Clearwire had been a success, Sprint and CW would have gotten along much better and set a model for wholesale network operation that might now ease how DISH, Sprint-SB and Clearwire engage with each other.

      The mobile broadband market has been described as 'broadband everywhere'. If so, then that means everybody is in competition with each other. On the other hand, the major theme for the wireless industry has been 'the rich get richer and the poor vanish or are eaten'. Since the break up of AT&T the industry spun apart, was revolutionized by wireless and has consolidated to where the two largest operators control about 70% of the market and the government and FCC are busting backwards to sell spectrum to the highest bidder to trickle some drops back into the national debt bucket. That should naturally make the belligerent by nature mind set of managers think more about how to collaborate to capture back some of that 70% and be in a better position for the next waves of market innovations than to play petty games of stabbing each other in their backs. However, that does not appear to be the prevailing trend or common wisdom. Besides, how much fun would Ergen and Hesse have cooperating rather than grandstanding? Boring but necessary?

      Sprint has marketshare and brand name in mobile markets that is far superior to DISH. DISH has a brand name image in digital TV including home entertainment device innovation. These two worlds are colliding so there could be synergies in joint marketing efforts.

      Sprint and Softbank both have device capability... with Softbank having used innovations that they developed and marketed differently than their competitors to gain marketshare against the odds. I'd give the edge to Softbank on device and marketing innovations that have produced results. Sprint's attempts with WiMAX delivered results but then only to a point and then had to be dropped because the industry did not line up behind them.

      Clearwire is not technically or a market an innovator ... just a follower even in WiMAX ...new tech stalemated.

      Softbank is among the leader developers of leading edge network technologies including development of techniques to prevent interference including when small cells are used. They put what they preach to practice... in active networks including in new TD-LTE in 2.5GHz in Japan. That technology edge can be transferred to the USA to have an impact across spectrum but where the most untapped resource of the 2.6GHz band can be made to yield a significant improvement.

      Why would Softbank/Son want to engage in a collaboration with DISH/Ergen? Son knew Hesse from previous encounters over the years and said he has grown to understand and trust him. Ergen can be a real bull in a China shop... his 'take no prisoners' demeanor does not instantly bring out the warm and cozy tidings. However, he has proven adroit at business decisions and timing.

      The axiom 'the whole is greater than the sum of the parts' must be substantially true for business consolidation or collaborations to make sense. It does make sense for a hook up of DISH+SB-S+CW.

      However, these are BODs and management of major companies with egos as big as all get out... what makes sense on paper may not make sense to them personally.

      • 3 Replies to teamrep
      • As a short counter point TR, AT&T needs content access, marketing and spectrum, all of which Verizon gained with the Cable Co.s.

        Nothing would likely prevent them from snapping up all of DISH (and potentially some Clearwire spectrum with them), even if the FCC/DOJ would make them re-auction some of the newly acquired assets. This seems much more like one of the duopoly twines way of operating, keeping SB-S in a box and working from a much stronger position by having control of much of the usable spectrum and forcing SB-S to compete aggressively for the required spectrum to grow their business.

      • It would be a disruptive game changer, but I think for it to work, CLWR would have to be the "Switzerland of Spectrum"... which means going back to the wholesale model. I don't think there is any way all those supersized egos could do it otherwise.

      • it will never happen. The last thing that sprint want is another wireless carrier to compete with. Verizon, ATT and Tmobile do not want another national carrier either. Sprint has many choices that Dish does not have. The prime reason Sprint want to own clearwire outright is savings from the combined company. but let's say that sprint will not acquire clearwire but retain its 51% ownership. in this case, because of clearwire commercial agreement with sprint and most important of all, because of the equityholders' agreement, there is no way that clearwire can sell excess capacity, spectrum to another company without sprint's approval. even if dish owns the remaining 49% of the company, dish will be just like any other mutual fund or hedge fund company that owns clearwire shares without any control or direction over clear wire. By the way, comcast will not sell its share to dish. the last thing comcast wants is dish to be a stronger competitor. so even if, sprint cannot acquire clearwire, it will end up with almost 65% of clearwire. This whole thing is just a chess game with many moving parts. fcc requires dish to cover 70% of population 7 years from now. dish does not have fund to start a network on its own. it has to partner with an existing carrier or sell its spectrum. ATT needs spectrum and rumored to be interested in dish's spectrum. neither att or sprint want to partner with dish. therefore, dish jumping on to clearwire is a tactic to make its spectrum more valuable since if dish does acquire clearwire, it will be harder for att to buy dish's spectrum. not by chance, this morning rumors that att looking to europe for acquisition. if that is true, then att will not be able to buy dish or its spectrum. again another tactic used by att to signal to dish that better to decide soon to sell itself or spectrum to att. so in a few months, fcc will approve soft bank sprint deal with or without clearwire being part of it. the special committee of directors will conclude that dish offer is not feasible. dish will have to turn to direct tv or att. and clearwire will be acquired by sprint for a price not much different from current price.

    • Charlie did go to Asia shortly after the S, SB announcement. Although when the news broke, S was adament about it not needing CLWR in the deal, but we all knew better. Then the shuffling of ownership scoop happened. It is going to be interesting to see how all of this plays out.

      Sentiment: Buy

    • that is probably the most sane post [including my rants] on this board in day's...s-sb-dish and clwr coming together....hesse and son need to get rid of all the distractions and get back to work...btw, it now appears that t-mobile and pcs are making a bid to buy LEAP.....see below..

      Leap Wireless International Inc. (LEAP) gained the most in five months after an analyst said there’s a 70 percent change MetroPCS Communications Inc. (PCS) and T-Mobile USA will bid for it after completing their merger.

      Leap advanced 9.6 percent to $6.88 at the close in New York, for the biggest gain since Aug. 10. Shing Yin, a Guggenheim Securities analyst, said such a deal would “make sense.” The San Diego-based pay-as-you-go wireless carrier’s shares dropped 28 percent in 2012 for the sixth-consecutive year of declines.

 

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