Clearwire may slow WiMax build to cut funding gap
NEW YORK (Reuters) - Clearwire Corp may build its high-speed WiMax wireless network more slowly than originally planned if credit markets do not improve by early 2010, Chief Executive Benjamin Wolff said on Monday.
Clearwire, whose shares rose 15 percent in Monday's trading, completed its venture deal with Sprint Nextel and other partners on Friday.
Even after getting $3.2 billion from companies such as Intel Corp, Comcast, Time Warner Cable Inc and Google Inc, Clearwire needs another $2 billion to $2.3 billion to build its network.
But because credit markets have deteriorated rapidly since Clearwire announced its plans in May, the company could decide to build the network more slowly if there is no improvement to market conditions.
"If we could raise money in the middle of next year, end of next year, even early 2010 that would be plenty of time to continue on the pace we talked about before," Wolff told Reuters.
Clearwire said in May it planned a network that reaches about 140 million people by the end of 2010 using WiMax, an emerging technology that promises to blanket entire cities with high-speed wireless Internet services.
But Wolff believes the company is more than two years ahead of rivals in building next generation wireless services and consequently could afford to slow down its network plan if necessary.
"If we build more slowly, it causes the funding gap to come down," he said, adding that the slower it builds the network the easier it is to expand into new markets using revenue from existing services.
"We're competitively in a very good space. I don't feel like we have to get the company in a situation of needing to raise capital prematurely given this market environment," he said.
The company will reveal more about how it plans to proceed after its first board meeting in January.
Clearwire's bigger rivals AT&T Inc and Verizon Wireless, a venture of Verizon Communications and Vodafone Group Plc expect to have rival high-speed services starting around 2010.
Clearwire's Wolff said the company aims to upgrade the its existing wireless service in 46 markets to WiMax by the end of 2009 but that some of those markets could slip into 2010 if the company does not receive required permits on time.
Wolff told reporters on a conference call that the company would be able to operate independently of its investors, which would have no say on decisions such as the timing of network launches in particular markets.
Clearwire's non-executive chairman is wireless pioneer Craig McCaw who founded the company. Its board will initially have eight board members including Sprint's Chief Executive Dan Hesse and its strategy chief Keith Cowan as well as Intel executive Sean Maloney.
It plans to fill another five board seats in coming weeks.
The company's cable partners are expected to offer wireless services under their own brands using the Clearwire network.
Time Warner Cable told the Reuters Media Summit on Monday that his company expected to have limited WiMax services on offer using the Clearwire network in one or two markets in late 2009 or early 2010.
Clearwire said it would call its high-speed wireless WiMax service "Clear" instead of the "Xohm" brand Sprint has been using. Sprint recently launched a WiMax service under the Xohm brand in Baltimore, Maryland.
For the venture's first twenty days, it will trade under the CLWRD symbol before reverting back to its CLRW trading symbol, Clearwire said.
(Editing by Derek Caney)