Wednesday, October 3, 2012

Clearwire May Delay LTE Network Build

Clearwire says it is evaluating its Long Term Evolution 4G network plans, to align spending with expected revenue, and "may elect to delay a portion of our deployment schedule accordingly."

In one sense, that is not helpful to Clearwire  at a time when other mobile service providers are building their LTE networks as fast as they can. On the other hand, helpful or not, Clearwire cannot afford to spend more capital than it has access to, even if it would prefer to build faster. 

Clearwire has said it will begin building the LTE network early in 2013 and have 5,000 LTE sites up by middle of 2013.

Clearwire had $1.2 billion in cash at the end of the second quarter and, based on its needs, had enough cash for "at least" the next 12 months. The company, which holds a large chunk of wireless airwave licenses, also has said it could sell assets to raise cash.

As a practical matter, Clearwire might ultimately wind up functioning as a "spot supplier" of additional LTE capacity in markets with heavy usage, rather than as a complete national network using only its own facilities. 

That would not be an unusual pattern in the industry, where virtually no networks have network everywhere. Such a plan also would better match the capital Clearwire seems to have available.  

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