Sprint Set to Pump Additional US$1 Billion into WiMAX Venture

­USA based WiMAX network operator, Clearwire is set to receive a US$1.5 billion cash injection from Sprint Nextel and its partners, reports the Wall Street Journal. Citing the usual people close to the matter, the newspaper said that Sprint Nextel would contribute US$1 billion of the extra investment, with the rest coming from the other shareholders.

Sprint Nextel combined its WiMAX network with Clearwire in May 2008, with Sprint Nextel taking a 51% stake in the enlarged company. The other shareholders are Comcast, Intel, Time Warner, Bright House and Google, although Google is reported to be not involved in this round of financing. In addition to the joint venture, the deal will allow Clearwire to use Sprint's long-distance and backhaul networks, and sales force. It will also pay below-market rates for Sprint's cell towers.

In May 2008, the company secured US$1.05 billion from Comcast, US$1 billion from Intel, US$500 million from Google, US$550 million from Time Warner and US$100 million from Bright House. Sprint Nextel and Clearwire contributed their existing networks and operating licenses. Sprint ended up with 51%, with existing Clearwire shareholders at 27% and the new investors at 22%.

Earlier this year, Intel said it would take a US$950 million impairment charge related to its investment in Clearwire, citing a decline in Cleawire's share price. Google also wrote down its holding by $355 million while Comcast took a US$600 million impairment charge.

Clearwire has previously said it needs a further US$2 billion to expand its network to be able to cover up to 120 million people in the USA by the end of 2010.

There have been rumours that Germany's Deutsche Telekom could consider an investment into the company, but the newspaper confirmed that these talks had been terminated.

Sprint is expected to fund its investment through debt or its own internal resources after attempts to sell an equity stake in the company failed.

Clearwire is due to announce its financial results tomorrow (10th Nov).

The company has previously said that it expects to have some 1.3 million subscribers by the end of 2009 and 4.6 million by the end of 2010. The company is forecasting revenues of over US$17.5 billion by 2017, by which time the company expects to have around 31 million subscribers.

On the web: Wall Street Journal

Posted to the site on 9th November 2009