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Clearwire Corporation (CLWRD) Message Board

telcostuff 5 posts  |  Last Activity: Aug 9, 2014 6:00 PM Member since: Dec 21, 2012
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  • telcostuff by telcostuff Jul 29, 2014 8:35 PM Flag

    First post on this MB. I spent a lot of time monitoring the CLWR board back in the "it's going BK days" and thought it was appropriate to rehash some history here. The CLWR board was equally passionate with huge differences in opinion with what the real value of the company and its spectrum assets. Bleeding cash and requiring huge infusions to jump to the next technology curve from Wimax to LTE, it was a "sitting duck" that took many shots from analysts who struggled to assign value to the bad business and #$%$" 2.5GHz spectrum(47B Mhz-pop) that CLWR controlled huge swaths of. The smartest posts on that board turned out to be the ones who simply took a stab at the dominant variable in the equation: spectrum valuation.

    franc.reason has tapped everyone on the head here on that point and challenged those to review his figures.
    There are no argument on the liabilities and cash assets of NIHD. In order of importance that leaves spectrum assets, towers and remaining infrastructure to value. For this investment exercise I'm putting a value of $0 to equipment. Existing towers? Keeping it simple, I'm zero-ing that out too.

    Now spectrum. The CLWR deal closed at a buyout price of $5/sh. This implied a net asset value of ~$6.5B and spectrum value of ~$9B or $0.196/Mhz-pop....for its #$%$" spectrum. NIHD has a mix of spectrum holdings, much of it decidedly "uncrappy" 800Mhz iDEN low band. franc is valuing it at $0.25/MHz-pop. Very fair price in my mind and I totally agree with that as a low end estimate. That leaves me with $1B+ net asset and $7/share. Anti-monopoly legislation only helps.

    From an old CLWR board post....

    "They value a full liquidation of CLWR @ $9.23/share (if the spectrum were to be sold for 34 cents/MHz-POP) with a full conversion of Class B shares to Class A shares.
    Cash $1,426,875,000
    Debt -$4,019,326,000
    Other debt -$1,138,909,000
    Spectrum sale $15,640,000,000
    Total $11,908,640,00

    Sentiment: Strong Buy

  • telcostuff telcostuff Aug 2, 2014 7:44 PM Flag

    Great point. Project accelerate as stated at the start in 2013 a plan to deploy LTE to select markets in Mexico and Brazil. NIHD holders should not lose track of what Sprint did with valuable iDEN 800MHz spectrum, they used it for LTE coverage. I'm not underestimating the possible synergies between Softbank/Sprint and NIHD as iDEN spectrum is repurposed to mobile broadband LTE in Mexico and Brazil. The 3G growth NIHD is experiencing will help the overall base business while they continue to work on their LTE expansion plans.

    Sentiment: Strong Buy

  • telcostuff by telcostuff Aug 4, 2014 9:14 AM Flag

    Not trying to be Captain Obvious here, but I did ask more questions about estimated spectrum valuations of IR and they told me they will have to do this exercise post earnings. "We are in a quiet period." Seems they will go un-quiet on Aug 7 for earnings. Will be interesting to see what is shared then.

    Sentiment: Strong Buy

  • telcostuff telcostuff Aug 9, 2014 11:00 AM Flag

    Couple comments. NIHD has 3 different networks at this time: iDEN(2.5G): WCDMA(3G) and LTE(4G). Most of the subscribers are on the old iDEN Network, which was a proprietary push to talk service with an digital IP backbone. There are always interoperability issues between Networks, and network solution providers make all sorts of gateways to bridge disconnects as needed. iDEN is/was the cash cow and will continue to bleed subscribers while WCDMA is seeing growth, watch Brazil figures, and NIHD signed a network sharing agreement with Telefonica to provide additional coverage on WCDMA. LTE is the preferred direction for NIHD, best performance and lowest latency, but they would have to accelerate a shutdown of iDEN to reuse the valuable 800MHz spectrum for LTE...similar to what Sprint did in the US. The higher frequency bands of PCS and AWS can be used for CDMA just fine.

    Ideally in a M&A situation, you would look to merge similar Networks, i.e CDMA to CDMA, LTE to LTE, etc to keep costs down and maximize reuse. iDEN is the tricky part, as they don't want to kill the ARPU golden goose too soon, but they do want to move to LTE.

    There is a PTT feature called PRIP that is deployable across 3G and 4G Networks that NIHD uses. That way they can continue to offer PTT service to loyal iDEN subscribers as that network migrates to LTE.

    Sentiment: Strong Buy

  • telcostuff telcostuff Aug 9, 2014 6:00 PM Flag

    PRIP is an easily deployable PTT service on smartphones for 3G and 4G networks. NIHD would be very silly to leave those good customers hanging. So PTT is available on all the NIHD networks.

    Sentiment: Strong Buy

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