Clearwire snags AT&T plum
The $300 million deal for licensed spectrum being sold by AT&T will bolster Clearwire's goal of building a nationwide WiMax network.
Seattle Times technology reporter
Clearwire will pay $300 million in cash to acquire a large swath of airwaves from AT&T to roll out wireless broadband Internet in the U.S.
The deal comes as the Kirkland company is gearing up for an initial public offering that could raise up to $575 million.
The airwaves are necessary for a nationwide network based on WiMax technology.
Unlike Wi-Fi networks in homes, coffee shops or office buildings that use unlicensed spectrum, WiMax is typically deployed across large areas, using licensed spectrum to ensure security and quality.
The Federal Communications Commission mandated that AT&T sell the spectrum as a condition of its 2006 merger with BellSouth, the airwaves' original holder. The spectrum is mainly in the Southeast.
The sale to Clearwire is expected to be final by June.
Its sale does not include spectrum that BellSouth, and now AT&T, use to provide wireless broadband service in about 15 markets.
The FCC is requiring AT&T to offer service by mid-2010 to 25 percent of the population in the service area where it continues to own spectrum.
An AT&T spokesperson said yesterday that its customers will be unaffected by the sale.
Clearwire claims the second-largest spectrum holdings behind its main wireless broadband competitor, Sprint Nextel.
It said in an updated filing Tuesday that it has enough spectrum to cover areas with an estimated 214 million people in the U.S.
The spectrum purchased from AT&T will boost its holdings about 14.2 percent.
Clearwire declined to comment on the purchase.
Last week, Clearwire said in a Securities and Exchange Commission filing that it had increased the maximum it could raise in its initial public offering to $525 million, from $400 million.
The money will go toward expanding its market, acquiring more spectrum and general corporate expenses.
At the end of 2006, Clearwire had about 184,400 subscribers in about 35 markets.
The company said it expects to launch additional markets that would bring the number of people in areas it covered to 18 million this year and to 45 million in 2008.
It estimates that based on this schedule, it could have as many as 375,000 to 400,000 subscribers by the end of the year.
Tricia Duryee: 206-464-3283 or email@example.com
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