Summary
Rewinding tech industry press coverage over the past few years shows that Clearwire has come a long long way. Even the most cynical pundits should finally admit that Clearwire is operating and innovating in ways we have never seen before.
Analysis
The addition of 10 new markets is telling -- especially in their selection. While many might be scratching their heads wondering about the relevance of a markets listed, it's important to consider the topologies over the population. One cannot expect a single market to provide all the invaluable lessons a next generation operator will need to have under its belt. Clearwire is showing all indications that it wants to learn these lessons early and often.
So, who is along for the potentially $2B ride where these lessons are learned? Google, Intel, Comcast, Time Warner Cable, privately held Bright House, and other investors have each signed on as part of a $3.2B funding vehicle. That said, even if these collective funding participants are slow to release Sprint Nextel Corp. has communicated commitment to cover any near term variances.
Putting aside some of the manufactured concerns over access to capital that make for salacious headlines, it's important to review what market Clearwire has gone after -- developers.
Think developers don't matter? A pretty successful company named Microsoft famously disagrees.
And for those scratching their head over the 10 new markets mentioned earlier:
Think that developers getting free service aren't the right folks for the bottom line? Think again.
In summary, Clearwire is a big bet. It's not AT&T. It's not Verizon. It's a completely new way of attacking the market for wireless broadband. While the established titans are deciding when to spend on their legacy networks, Clearwire is blazing a trail and learning lessons that are far outside the risk tolerance for bigger players. It is these same risks that can lead to the greatest rewards.
Jay Cuthrell consults with leading institutions through GLG
Analyses are solely the work of the authors and have not been edited or endorsed by GLG.
