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Clearwire Corporation (CLWRD) Message Board

  • bjspokanimal bjspokanimal May 12, 2013 2:09 PM Flag

    Sprint/Softbank have picked "now" as the best time to steal clearwire... for a reason.

    WiMax has topped off at it's highest user count... 9 to 10 million subs. Clearwire has a year of cash remaining and has minimized it's cash burn with a surprisingly low EBITDA loss in Q1. Clearwire is also ramping it's first 2,000 LTE sites.

    Clearwire's initial sites are their best in terms of anticipated TD-LTE "tonnage". Since their LTE usage contract with sprint is not flat rate like the WiMax contract is, that tonnage will represent the highest "return on asset" value per cell site as clearwire can achieve with 2,000 initial sites.

    Once those volumes begin to flow, and clearwire pockets the $350 million bonus for reaching it's revised build-out target, it's conceivable that the company could combine the new revenue flow with more slowly declining Wimax revenues after next december to quickly reach EBITDA break-even by next winter.

    I believe that Softbank and Sprint chose December to strike with their ridiculous, $2.97 bid because they didn't think the timing would ever be more ripe, given their need for clearwire's spectrum and the revenues that it will produce as TD-LTE ramps over 2013 and 2014... especially when LTE-Advanced massively increases the speed of it in ways that Sprint's own capacity couldn't achieve.

    There is NO QUESTION in my mind that there are better days ahead for clearwire once sprint's offer is voted down this month. I can't see the scenario that produces a worse scenario for Clearwire short of such a scenario hurting sprint/softbank even more as a result of the fast-developing inter-dependency of these companies.

    Spok

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