Clearwire Funding Gap May Put Backers' Plans on Hold

[David Farber <dave () farber net>]

Begin forwarded message:

From: dewayne () warpspeed com (Dewayne Hendricks)
Date: February 12, 2009 9:03:52 AM EST
To: Dewayne-Net Technology List <xyzzy () warpspeed com>
Subject: [Dewayne-Net] Clearwire Funding Gap May Put Backers' Plans on  
Hold

Clearwire Funding Gap May Put Backers’ Plans on Hold
By Amy Thomson
<http://www.bloomberg.com/apps/news?pid=20601103&sid=auIVsaSJ65ZU&refer=us# 
>

Feb. 11 (Bloomberg) -- Clearwire Corp. may have to delay its network  
expansion if it fails to close a funding gap of about $2 billion,  
dealing a setback to investors such as Intel Corp. and Google Inc.  
that want to break the phone companies’ dominance of wireless Internet.

Clearwire said in May that it would need the money to meet a goal of  
reaching almost half the U.S. population with its network by the end  
of 2010. Tighter credit and wary investors have crimped funding  
sources, said Chief Executive Officer Ben Wolff, who wouldn’t say  
whether that would delay the project.

“It’s clear that capital markets are closed for either borrowers or  
companies that are trying to raise capital, regardless of what kind of  
company it is,” Wolff said. “We’ve seen challenges across the board.”

A delay may rob Clearwire and its partners of an advantage over  
carriers AT&T Inc. and Verizon Wireless. Clearwire is using a standard  
called WiMax, while the phone companies have adopted the Long Term  
Evolution format. That rival technology will be ready as soon as next  
year.

Google, Intel and other backers put up $3.2 billion last year to fund  
Clearwire’s network, seeking high-speed Web access to spur demand for  
their products and services.

Clearwire will update investors on its expansion plans in the coming  
weeks, spokeswoman Susan Johnston said. Intel, the world’s biggest  
computer-chip maker, will provide an update to its plans for WiMax  
today.

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