Clearwire Takes Another Cut at IPO

Well funded wireless broadband operator Clearwire LLC (Nasdaq: CLWR) is taking a second shot at an initial public offering, this time looking for $400 million to expand its network in the U.S. and migrate to mobile WiMax .

Kirkland, Wash.-based Clearwire -- the latest venture from pioneering wireless entrepreneur Craig McCaw -- had initially filed for an IPO back in June. The planned flotation was dropped, however, after Intel Corp. (Nasdaq: INTC) and Motorola Inc. (NYSE: MOT) put up $900 million in additional funding.

Rolling out WiMax in the U.S. is an expensive business, however, which is why Clearwire has decided, again, to test the public funding waters. "Our business plan will require us to raise substantial additional financing both in the near term and over the next five years or more," the company says in its latest S-1 filing with the Securities and Exchange Commission (SEC) .

Part of the cost is going to involve introducing more mobile WiMax capabilities into its network. The company will steal a march on its major rival in this niche -- Sprint Nextel Corp. (NYSE: S) -- by introducing a PC card for its users in the middle of next year. Sprint is planning to deploy initial mobile WiMax markets at the end of 2007, with a larger rollout the year after.

Clearwire says that it will initially roll out mobile WiMax infrastructure in new markets and then upgrade its existing networks -- presuming the WiMax equipment is available. "If mobile WiMax network equipment and devices become commercially available and meet certain requirements, we expect to deploy mobile WiMax networks in our new markets and, over time, migrate our existing markets to the same technology," the firm notes.

Clearwire is also looking to purchase new spectrum for WiMax services, even though it claims to already have the second-largest compatible spectrum portfolio in the U.S., after Sprint Nextel. "As of November 30, 2006, our spectrum rights in the United States covered an estimated 205 million people," the company writes in its filing. Clearwire claims more than 188,000 U.S. subscribers in 34 markets.

The company is not content, however, to stay confined to its domestic market. It has already made clear its intention to expand in Europe and is actively looking for more bandwidth on the old continent.

Such ambitions don't come cheap. Clearwire's overall revenue for the first nine months of this year was $76 million, while its operating loss ran to $149 million. The company has borrowed $755 million since August 2005 and currently has a deficit of $366 million.

The firm says that it hopes to increase revenues by adding new connectivity mechanisms and premium services to its network. "We currently offer VoIP telephony services in 13 markets, and plan to offer other premium services and applications, such as WiFi hotspots, public safety services, security services, and subscription-based technical support," Clearwire says in the S-1.

— Dan Jones, Site Editor, Unstrung