The cost to buyout Clearwire?

[ericdabbs]

Alright you financial gurus out there, I don't know if many of you guys have been paying attention to Clearwire's stock price (ticker: CLWR) but it is quickly heading to $1 (currently trading at $1.11).

 

If Sprint were to buy out Clearwire if it falls to $1, how much would it have to pay to buyout the remaining 46% stake in Clearwire? Ideally I want to see Clearwire survive on its own for a couple more years until Sprint can lock up some more PCS spectrum (ex: PCS H block) and Sprint's balance sheet to improve until it bought them out. I am curious to find out what Sprint is going to do if Clearwire gets near delisting status. Any financial gurus out there want to chime in on their thoughts?

[alphnasx]

CLWR is worth alot than current price (4-5?). like to see CLWR get more LTE wholesale customers (Sprint & Leap for now). CLWR should offer wireless LTE internet too.

VZW going to kill their grandfathered unlimited data plan so u know VZW knows they don't have enough spectrum / capacity

faster the speed, the faster you use data. new LTE devices are data hogs!!!

 

Sprint keeps Unlimited Data, get more customers, & offload excess data off to CLWR LTE

 

moving from voice to data usage

Edited May 16, 2012 by alphnasx

[9erHater]

Well, Clearwire has a market cap at around $559M, so 46% of that is around $257M. If Sprint actually tried to buy Clearwire, they'd have to pay a premium price over the market cap, so maybe $400M. The problem is that if you buy Clearwire, you also assume Clearwire's debt, which is at least $4B (I didn't look at their detailed report). I don't think Sprint would be adversely affected if Clearwire gets delisted.

[MacinJosh]

Well' date=' Clearwire has a market cap at around 559M, so 46% of that is around 257M. If Sprint actually tried to buy Clearwire, they'd have to pay a premium price over the market cap, so maybe 400M. The problem is that if you buy Clearwire, you also assume Clearwire's debt, which is at least 4B (I didn't look at their detailed report). I don't think Sprint would be adversely affected if Clearwire gets delisted.[/quote']

 

How much of Clearwire's debt is from Sprint alone is the first question. You first subtract that. If Sprint had to do something, they could afford to absorb Clearwire. But I don't think that Clearwire will get delisted yet. They should rebound.

[4GHoward]

I don't think Sprint should buyout Clearwire since they are trying to block the Verizon Wireless-SpectrumCo Deal. If that happens, Verizon will probably fire back at Sprint for trying to block their spectrum deal.

[bigsnake49]

I don't think that Sprint has been buying Clearwire debt lately.

[S4GRU]

I don't think that Sprint has been buying Clearwire debt lately.

 

It's not so much that Sprint has been buying Clearwire debt, as much as Clearwire has in the past held its debt payments over Sprint to get Sprint to give them more money. This is what occurred back on December 1st. If Sprint is de facto responsible for Clearwire's debt, because they cannot allow Clearwire to default, then it makes a lot of sense for Sprint to buy out Clearwire, if and when it has the funds to do it.

 

This was discussed in detail in a December article: http://s4gru.com/ind...lions-in-value/

 

Sprint is, in reality, servicing Clearwire's debt, for if Clearwire defaults, its spectrum goes to the creditors, and Sprint's entire 4G network goes with it. One of the primary benefits of the new agreement announced by Sprint and Clearwire on December 1 is that the Clearwire will make a $237 million debt payment, as scheduled. Clearwire's debt may not be on Sprint's balance sheet, but Sprint is still wholly responsible for it. We think that this is absurd, and are calling on Sprint to do what is necessary and acquire Clearwire outright.

 

Robert

[bigsnake49]

It's not so much that Sprint has been buying Clearwire debt, as much as Clearwire has in the past held its debt payments over Sprint to get Sprint to give them more money. This is what occurred back on December 1st. If Sprint is de facto responsible for Clearwire's debt, because they cannot allow Clearwire to default, then it makes a lot of sense for Sprint to buy out Clearwire, if and when it has the funds to do it.

 

This was discussed in detail in a December article: http://s4gru.com/ind...lions-in-value/

 

 

 

Robert

 

I think Sprint is praying like heck that somebody else buys Clearwire first and they get their money out of it. If they can get another 10-20Mhz of spectrum somewhere else, they would jump at the chance. They like PCS spectrum or near PCS spectrum. They might even settle for Dish spectrum. They don't like Clearwire period.

[4GHoward]

I think Sprint is praying like heck that somebody else buys Clearwire first and they get their money out of it. If they can get another 10-20Mhz of spectrum somewhere else, they would jump at the chance. They like PCS spectrum or near PCS spectrum. They might even settle for Dish spectrum. They don't like Clearwire period.

 

T-Mobile should buyout Clearwire. Both companies are based in Bellevue, Washington. That should be an easy transition to move the Clearwire Employees to the T-Mobile Headquarters from the Clearwire Headquarters.

[S4GRU]

I think Sprint is praying like heck that somebody else buys Clearwire first and they get their money out of it. If they can get another 10-20Mhz of spectrum somewhere else, they would jump at the chance. They like PCS spectrum or near PCS spectrum. They might even settle for Dish spectrum. They don't like Clearwire period.

 

Agreed. However, Sprint also knows that Clearwire is a definite, whereas PCS H Block or Dish spectrum are just possibilities. So they have to keep Clearwire in their back pocket for now. I would hold my nose and buy out Clearwire this year, if they can buy up remaining shares around a $1. It makes more sense than buying MetroPCS or Leap.

 

Robert

[S4GRU]

T-Mobile should buyout Clearwire. Both companies are based in Bellevue, Washington. That should be an easy transition to move the Clearwire Employees to the T-Mobile Headquarters from the Clearwire Headquarters.

 

Sounds like a marriage made...in Purgatory.

 

Robert

[4GHoward]

How about a Joint Venture between China Mobile and Clearwire?

[ChadBroChillz]

I think Sprint would rather eat up clearwire vs letting tmobile or another major competitor buy them out. I am sure sprint is just waiting for the right time to buy them out. I feel like the quarter after sprint becomes profitable, they swallow up clearwire.

[MacinJosh]

 

Agreed. However' date=' Sprint also knows that Clearwire is a definite, whereas PCS H Block or Dish spectrum are just possibilities. So they have to keep Clearwire in their back pocket for now. I would hold my nose and buy out Clearwire this year, if they can buy up remaining shares around a 1. It makes more sense than buying MetroPCS or Leap.

 

Robert[/quote']

 

Sounds like a hostile takeover to me. I would be willing to sell out for more Sprint stock. How does the FCC handle hostile takeovers and wireless spectrum?

 

Sent from Joshs iPhone 3Gs using Forum Runner

[JeffDTD]

If sprint has its focus set on running a 38,000 tower network and getting its income statement positive, the only use that spectrum will ever be to them is additional capacity for spectrum strained markets. If sprint became owner of clearwire tomorrow, what would they do? Make plans to throw cards on towers in densely populated places on their nv towers and sit on the rest of it until they can start decommissioning sites. Then be more scrutinized because they have a plentiful supply of cost prohibitive spectrum the next time they try to get other spectrum. I agree that clear is a liability as long as they dont own it, but Im not sold on the idea of cash strapped sprint "outright" either. Just seems even more risky that what theyre doing now. Both need a sugar daddy! If money is scarce for buildout, clear isnt a great buy.

[Abyss19707]

Sprint will end up buying Clearwire in a few years to get access to all of that 2.5/2.6 GHz spectrum they could use to bolster their LTE

[bigsnake49]

Sprint will end up buying Clearwire in a few years to get access to all of that 2.5/2.6 GHz spectrum they could use to bolster their LTE

 

Unless they plan to offer HDTV with all that spectrum, it is a total waste and would be counted against them if they were to bid or buy other spectrum or other companies. They might need another 10-20MHz or so in densely populated NYC or San Fran, but not in too many other places. I would rather they bought out Metro or Cricket or both and do some swapping of AWS spectrum for PCS spectrum with the holders of AWS spectrum. However, I think they want to wait until they either return to profitability or their stock recovers or both, so that they can buy either/both for cheap.

[ChadBroChillz]

If sprint has its focus set on running a 38,000 tower network and getting its income statement positive, the only use that spectrum will ever be to them is additional capacity for spectrum strained markets. If sprint became owner of clearwire tomorrow, what would they do? Make plans to throw cards on towers in densely populated places on their nv towers and sit on the rest of it until they can start decommissioning sites. Then be more scrutinized because they have a plentiful supply of cost prohibitive spectrum the next time they try to get other spectrum. I agree that clear is a liability as long as they dont own it, but Im not sold on the idea of cash strapped sprint "outright" either. Just seems even more risky that what theyre doing now. Both need a sugar daddy! If money is scarce for buildout, clear isnt a great buy.

Would they need more spectrum? In the top 100 markets, Clearwire averages 150 by comparison Verizon averages 118 I believe. I believe it will be eons before they need to participate in a spectrum auction. Also they would not have to sit on it, They could start a home internet service with that spectrum. Plenty of people are stuck with slow speeds from their ISPs, and sprint could come in offer better speeds at a competitive price. Or sprint could focus on mobile devices, and offer better data prices compared to the other three, while offering faster speeds. Or a bundle of both, like clearwire does currently. Both of these plans would have more users jumping to sprint, which means the spectrum is making them money.

[ericdabbs]

Would they need more spectrum? In the top 100 markets, Clearwire averages 150 by comparison Verizon averages 118 I believe. I believe it will be eons before they need to participate in a spectrum auction. Also they would not have to sit on it, They could start a home internet service with that spectrum. Plenty of people are stuck with slow speeds from their ISPs, and sprint could come in offer better speeds at a competitive price. Or sprint could focus on mobile devices, and offer better data prices compared to the other three, while offering faster speeds. Or a bundle of both, like clearwire does currently. Both of these plans would have more users jumping to sprint, which means the spectrum is making them money.

 

Clearwire does provide home internet service. The only problem is that Clearwire would need to expand its footprint tremendously in order to serve a huge amount of customers for internet. The problem is not whether Clearwire has enough spectrum to support home internet service but rather the funds needed to have a thorough buildout on 2.5 GHz spectrum which is costly.

[ChadBroChillz]

Clearwire does provide home internet service. The only problem is that Clearwire would need to expand its footprint tremendously in order to serve a huge amount of customers for internet. The problem is not whether Clearwire has enough spectrum to support home internet service but rather the funds needed to have a thorough buildout on 2.5 GHz spectrum which is costly.

I was talking about what Sprint could do with that spectrum, so it is not just sitting unused. Clearwire does not have the funds, but sprint would. Also Sprint would not need to make a nationwide 2.5ghz network.

[Abyss19707]

 

 

Unless they plan to offer HDTV with all that spectrum, it is a total waste and would be counted against them if they were to bid or buy other spectrum or other companies. They might need another 10-20MHz or so in densely populated NYC or San Fran, but not in too many other places. I would rather they bought out Metro or Cricket or both and do some swapping of AWS spectrum for PCS spectrum with the holders of AWS spectrum. However, I think they want to wait until they either return to profitability or their stock recovers or both, so that they can buy either/both for cheap.

I do not know how much you know about spectrum but there are advanatages and disadvanages to the different types of spectrum.

 

The 700 A band is plagued with interference from TV. The 700 A B and C bands are not truly one band but multiple bands that can not easily be used in the same phone. All 700, A B and C, though are great at having the signals travel but not that good a capacity

 

The AWS is one of those ands that is the best to build on because it consist of 1700/2100 bands that give capacity and also travel good deals. Personally this is the best spectrum

 

The PCS is on the 1900 band and is again a good band for wireless connections like the AWS spectrum

 

2.5/2.6 spectrum is personally better then any spectrum listed above besides AWS or PCS for cities like New York because it gives high capacity. A high capacity network old be able to support the large population. You may have to locate the towers close to each other, with in a 1 mile range I believe for a constant network.

 

The only band I did not mention above is the 800 band but I have little knowledge

[jegillis]

A hostile takeover of Clearwire would be impossible without also taking over Sprint, so I doubt DT wanting to get out of the U.S. market will end up expanding Tmobile and no way the FCC allows VZ or ATT to take them over. Regarding buildout costs, in urban areas it should cost no more than any other additional spectrum that Sprint would acquire with NV. In fact NV was originally planed to host clearwire spectrum.

[bigsnake49]

I do not know how much you know about spectrum but there are advanatages and disadvanages to the different types of spectrum.

 

The 700 A band is plagued with interference from TV. The 700 A B and C bands are not truly one band but multiple bands that can not easily be used in the same phone. All 700, A B and C, though are great at having the signals travel but not that good a capacity

 

The AWS is one of those ands that is the best to build on because it consist of 1700/2100 bands that give capacity and also travel good deals. Personally this is the best spectrum

 

The PCS is on the 1900 band and is again a good band for wireless connections like the AWS spectrum

 

2.5/2.6 spectrum is personally better then any spectrum listed above besides AWS or PCS for cities like New York because it gives high capacity. A high capacity network old be able to support the large population. You may have to locate the towers close to each other, with in a 1 mile range I believe for a constant network.

 

The only band I did not mention above is the 800 band but I have little knowledge

 

Oh, yes, I'm well aware of the advantages and disadvantages of each band of spectrum, particularly when it comes to MIMO and handset real-estate. I'm also aware of the tradeoffs between capacity and propagation. AWS is perfectly good spectrum, but I think Sprint wants to limit their LTE supported bands to 3: 800, 1900 and 2500MHz.

[jegillis]

I do not know how much you know about spectrum but there are advanatages and disadvanages to the different types of spectrum.

 

The 700 A band is plagued with interference from TV. The 700 A B and C bands are not truly one band but multiple bands that can not easily be used in the same phone. All 700, A B and C, though are great at having the signals travel but not that good a capacity

 

The AWS is one of those ands that is the best to build on because it consist of 1700/2100 bands that give capacity and also travel good deals. Personally this is the best spectrum

 

The PCS is on the 1900 band and is again a good band for wireless connections like the AWS spectrum

 

2.5/2.6 spectrum is personally better then any spectrum listed above besides AWS or PCS for cities like New York because it gives high capacity. A high capacity network old be able to support the large population. You may have to locate the towers close to each other, with in a 1 mile range I believe for a constant network.

 

The only band I did not mention above is the 800 band but I have little knowledge

 

The various bands do not have any capacity advantages over another considering the same amount of allocated spectrum. The advantage of the higher frequencies in a phone are the smaller antennas required allow for more to fit into a phone handling more bands.

[pyroscott]

 

The various bands do not have any capacity advantages over another considering the same amount of allocated spectrum. The advantage of the higher frequencies in a phone are the smaller antennas required allow for more to fit into a phone handling more bands.

 

There is a difference in capacity. Every base station will allow a certain amount of users depending on the amount of spectrum allocated. The 700 mhz spectrum has a much larger coverage area per base station than higher frequencies. This can be mitigated with downtilt, but the higher frequencies allow higher capacity by default.

 

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