Clearwire Boosts Stock Offerings, Could Use Cash for Super-Fast TD-LTE

Clearwire (NAS: CLWR) said it will increase the size of its public stock offering from $300 million to $350 million, increasing its financial cushion and perhaps opening the door for the company to deliver an ultra-fast TD-LTE network.

The increase in the public offering of its Class A Common Stock, coupled with majority owner Sprint Nextel's (NYS: S) decision to purchase $295 million of Clearwire's Class B Common Stock in a private transaction, gives the company $645 million in fresh capital. The new funding comes just days after Sprint and Clearwire announced funding deals worth up to $1.6 billion over four years.

Clearwire has said it will use all of the money for general corporate and working capital purposes, including the deployment of LTE alongside its existing mobile WiMAX network, and for the operation and maintenance of its networks. Clearwire said previously that it needed at least $600 million to deploy an LTE-Advanced TD-LTE network across much of its WiMAX footprint, which currently covers around 130 million POPs.

BTIG analyst Walter Piecyk wrote in a research note that he expects Clearwire to issue more debt and raise its cash infusion to more than $1 billion. Then, the company will likely take significant vendor financing on top of this, which should remove any risk of default "for the foreseeable future."

The rapid influx of cash could allow Clearwire to deploy a TD-LTE network with 20 MHz uplink and downlink channels, twice the size of the channels Verizon (NYS: VZ) Wireless has launched. (However, Verizon's 700 MHz spectrum has much better propagation characteristics than Clearwire's 2.5 GHz spectrum).

"The rapid raise in cash by Clearwire could result in the launch of a fat channel TDD-LTE network by the end of 2012," Piecyk wrote. "We believe this network will offer the fastest wireless speeds available in the United States and will provide a competitive threat to wireless operators as well as wireline broadband service providers. Cable companies have ridiculed the impact of existing wireless broadband services that are limited by download speeds that are under 5 Mbps and deliver inconsistent video streaming experiences. A fat channel network will present a new challenge at a time when some are abandoning their ability to sell those services in favor of a new relationship with Verizon, which has announced two spectrum deals in the past week."

Clearwire LTE testing last year showed download speeds of up to 90 Mbps.

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