With new funds in hand Clearwire looks towards network expansion

Clearwire Corp. (CLWR) seems to be breathing a little easier following its recent fund raising activities with talk of expanding its network operations to cover up to 250 million potential customers over the coming years.
The demeanor is in stark contrast to its decision last month to halt work on expanding its network beyond the 120 million pop mark planned for the end of this year as the carrier looked for ways to cut costs.
Speaking at the UBS Global Media and Communications Conference yesterday in New York, Clearwire’s CFO Erik Prusch said the carrier’s recent debt offering, which raised more than $1.1 billion, was just one of three options Clearwire was in the process of pursuing to help fund its network expansion plans. The other two included a spectrum auction and plans to raise equity from current and new investors.
With the recent funding success, Prusch said Clearwire is ramping back up its network plans, but reevaluating its retail structure. The carrier only just recently started adding more customers through its wholesale operations compared with its retail efforts and is looking to restructure its retail efforts along more cost efficient channels like telesales and online sales.
As for the often-talked about spectrum auction plans, Prusch said the carrier was just over half way through the process that could see the carrier sell off some of its vast 2.5 GHz spectrum assets that it claims it does not need. While not divulging who the numerous interested parties are, Prusch did note that there were offers for both nationwide, regional and market specific chunks of spectrum.
“There are a lot of interested parties, but we have not determined yet how much or where we will be selling spectrum,” Prusch said.
As for its other funding option, Prusch said the company was still in talks with both its current investors as well as new investors in the business. Sprint Nextel Corp., which owns a majority interest in Clearwire and has been the most vocal about providing additional funding needs, could participate in the current debt offering as a way of participating in Clearwire’s current funding plans.
Prusch did note that while some investors, most notably Comcast Corp., have said they are not interested in providing any additional funding the company has a number of other options to help with any funding needs.
As for its 2011 operational plans, Prusch said the carrier was focused on bolstering the density of its current network through the use of its spectrum assets, rolling out smart phones to help lure retail customers and building out additional coverage.
Those network and device enhancements could be more important as a number of chief rivals are aggressively targeting the so-called “4G” network space with both expanding networks and growing device portfolios.
Prusch added that Clearwire was still at an advantage in the retail space as the WiMAX ecosystem is still well ahead of both the depth and pricing scale of other “4G” technologies, an advantage he said WiMAX will maintain until at least 2012.
However, in a move to hedge its bets, Clearwire is trialing LTE services in the Phoenix area that Prusch said is providing Clearwire with options for if and when the tables in the ecosystem market change.
“People sign up for devices, not for a service,” Prusch explained. “We are building our plans around that time frame.”