Clear-er sailing for Clearwire?: Research firm upgrades mobile WiMAX player

Clearwire Corp. received a boost from Macquarie Research, which upgraded its rating on the wireless broadband provider from neutral to outperform citing greater clarity on funding possibilities as well as stronger than expected growth from its resale channels.
The research firm said it expects Clearwire to hit the $12 per share mark by the end of 2010, a near 20% bump over its current 52-week high of $10.07 per share. Clearwire’s stock was trading up more than 4% early Thursday at $8.31 per share.
Macquarie said it expects Clearwire could need up to $3 billion in new funding to complete its current build out plans covering 120 million potential customers by the end of next year. That funding is expected to come from Sprint Nextel Corp., which owns 51% of Clearwire, and the rest likely from either its cable partners or possibly from T-Mobile USA Inc.
Sprint Nextel has begun to increase its reliance on the mobile WiMAX network being deployed by Clearwire for its next-generation network needs having rolled out service in dozens of markets. The carrier offers unlimited data usage through the Clearwire network at a $10 premium on its current $60 per month, 3G data plans.
Sprint Nextel initially contributed its substantial 2.5 GHz spectrum holdings and related WiMAX network assets to Clearwire’s founding in 2008. The network assets included equipment in the Baltimore area that Sprint Nextel used for its Xohm-branded mobile WiMAX service.
Cable companies
For its cable partners, Macquarie noted that Time Warner Cable could be a strong candidate for future funding. TWC announced this week that it would begin offering its customers Clearwire-backed services beginning Dec. 1 in parts of North Carolina starting at $35 per month. TWC said the service will initially include basic Internet service, but that it plans to add the ability to program digital video recorders from a mobile device in the future.
TWC initially invested $550 million for a minority interest in Clearwire in 2008 with plans to add the mobile WiMAX service to its traditional triple-play of telecom offerings. Fellow cable provider Comcast Corp., which invested $1 billion into Clearwire, rolled out its mobile WiMAX-based services earlier this year.
Macquarie noted that the increased push by Sprint Nextel and the cable companies will slowly replace Clearwire’s current Clear branding as the driver of subscriber additions onto the mobile WiMAX network. The firm said it expects Clear-based subscribers to make up a majority of total subscribers through 2012, but that the resale partners will drive faster growth beginning as early as next year.
T-Mobile USA’s plans
The one wildcard in the equation remains T-Mobile USA’s interest in Clearwire. The nation’s No. 4 carrier is still playing catch up in the 3G space having fallen behind the deployment plans of its larger rivals due to spectrum constraints. The carrier’s current 3G plans rely on the AWS spectrum the carrier won in 2006, but do not provide for the needed capacity to launch a 4G network. T-Mobile USA recently announced plans to use 21 megabit per second HSPA+ technology across its network beginning next year, which could prove a stop-gap for the carrier’s eventual 4G plans. Those plans could include a reseller agreement with Clearwire to offer a branded mobile WiMAX service to its customers.
T-Mobile USA Inc.’s parent company Deutsche Telekom AG has also been rumored to be interested in possibly acquiring Sprint Nextel, which would provide a built-in 4G plan based on mobile WiMAX, but would be different from DT’s international plans to migrate to LTE technology.