My sympathies to the rank and file over at ftwr, this has been a disastrous week. Following the news yesterday of a missed interest payment and potential default, the wireless backhaul provider said it has reduced its workforce by 40% and suspended all capital spending in an effort to conserve the cash they have left. At the end of Q2, the company's headcount stood at132, which itself was already down from 160 already at the start of the year. That means there as many as fifty more folks hitting the streets today, just in time for Thanksgiving.
I can't say I'm terribly surprised though. FiberTower bet big on wireless backhaul, but it came to the party years too early, with a national plan that banked on the value of its 22Ghz and 39Ghz spectrum holdings. Owning lots of high frequency spectrum has not proved to be terribly useful thus far, and Clearwire's travails have taken a heavy toll this year. Their EBITDA only recently poked its head over the break-even mark, but seems likely to have backpedaled since if one doesn't count early termination revenue.
I still think while that the core of this business has proven non-viable on an independent basis, it makes some sense as an adjunct to a larger fiber-based approach. But perhaps what will happen (either in BK or out) is a breakup and sale of the assets by market to a variety of more locally based operators.
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