In an effort to raise money to continue its national WiMAX network, clwr is reportedly preparing to sell off some spectrum. The bidding is already supposedly in its second round and is being managed by Deutsche Bank AG. The rumored price tag? Between $2.5B and $5B, which would pay for a whole lot more WiMAX coverage – maybe even all of it if they can get $5B.
But that spectrum is the one big static advantage Clearwire has over its well-heeled LTE competition. They have lots and lots of it, more than anyone else, and that means that in the end they can serve the most bits. If they go through with it, Clearwire will be trading a static advantage for a dynamic one – the ability to finish their buildout quickly in exchange for a more even distribution of spectrum rights.
Of course, it’s only a slice of their spectrum holdings – supposedly 40Mhz per market. Clearwire will remain with a very large chunk, sufficient to move a heck of a lot of bits even still. One could argue that now, several years later, it is easier to see just how much spectrum the company needs and it makes sense to turn that which they don’t need into cash for the buildout – even if it strengthens the competition. Buy low, sell high, and roll it back into the business. But someday, they might look back and wish they took a different path to the funding, as one can’t make new spectrum.
The bidders for the spectrum are obvious, with AT&T (NYSE:T, news, filings), Verizon (NYSE:VZ, news, filings), Deutsche Telecom AG (ETR:DTE, news, filings), Time Warner Cable, and of course Sprint Nextel (NYSE:S, news, filings) – Clearwire’s majority owner. Who needs it the most? Probably DT’s TMobile, but who knows.
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Doesn’t seem to make a whole lot of sense given Sprint would likely have veto rights and wouldnt want to sell to a competitor.