Clearwire might miss December 1st debt payment of $237 million

Clearwire might miss December 1st debt payment of $237 million
Clearwire has a big decision to make regarding a $237 million debt payment that is due on December 1st. The company's coffers contain $700 million in liquid assets and the company continues to go out hat in hand, seeking cash to fund its WiMax network. Because of the financial restrainsts, Clearwire has not opened any new markets for WiMax this year and Chief Executive Erik Prusch recently told the Wall Street Journal that paying the debt in full would significantly reduce the company's cash reserves. The executive didn't say how long Clearwire could run on its current cash balance and if the firm defaults on the December 1st debt payment, it will still have a 30 day grace period.

Back in May, Clearwire said it would drop WiMax and turn to LTE technology for 4G services. At the time, the company said it had just enough money in the till to operate for a year. And things got worse for Clearwire when Sprint, the only company among the top four major U.S. carriers that offers WiMax 4G service, said it would aggressively rollout a 4G network and would support WiMax powered smartphones through 2012.

Sprint has already signed a long term deal to jointly develop LTE service with network wholesaler LightSquared. And while the carrier did recently raise $4 billion in notes due in 2018 and in 2021, there is no word if some of that cash will end up in Clearwire's pocket. Sprint owns 54% of Clearwire and some feel that the talk about default could be a ploy to force Sprint to purchase the company. Earlier this year, reports of a Sprint buyout of Clearwire surfaced, but obviously both sides never came to an agreement.

source: WSJ via Phonescoop

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5 Comments

1. nexusISbleh

Posts: 8; Member since: Nov 20, 2011

wimax is pretty bad hopefully sprint can change a lot of this and when they do I REALLY hope they keep things unlimited to compete

2. ZEUS.the.thunder.god unregistered

lets hope they can get outta this

3. biophone

Posts: 1994; Member since: Jun 15, 2011

Sprint should buy them they cant rosk them defaulting.

4. mikel45365

Posts: 10; Member since: Feb 07, 2009

WiMax isn't bad - the technology itself allows for very robust throughput and user experience. However, Clearwire's implementation and network rollout of the 4G flavor was done SO CHEAPLY and custerfu*ked so bad all over the nation that people have had really poor experiences. Cheap cheap cheap bit them in the ass. That is why Sprint is so pissed at them - they BLEW billions of dollars on the 'CLEAR' brand (hired thousands of ppl, ran expensive commercials, etc) and Sprint will now watch Clearwire assets be purchased at a fire sale (when they go bankrupt).

5. ngo2dd

Posts: 896; Member since: Jul 08, 2011

I agree with this because I was reading article about wiimax in Japan and their speed was about the same as LTE in Tokyo. And wiinax 2.0 can get up to 350 mbs

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