Looks like Clearwire’s IPO plans weren’t going too well. The company, which was started by telecom master Craig McCaw, withdrew its IPO plans on Wednesday and simultaneously said it had raised $900 million in a private equity round from Intel Capital and Motorola Ventures. Given Vonage’s poor public performance, the move was probably a smart one.
A good deal of that financing–$600 million–will come from Intel Capital, which calls the Clearwire financing the largest in its history. Part of the deal also includes a sale of Clearwire’s NextNet Wireless division to Motorola for an undisclosed sum, and from here on out Motorola will provide the network equipment for Clearwire.
Previously Clearwire had raised nearly $360 million from backers that include McCaw, Intel Corp., and Bell Canada, and now even without the company’s planned $400 million IPO, Clearwire will have over $1 billion to burn on its network. The company needs the funds, given WiMAX networks are very expensive to build, and the company lost $140 million last year. The new injection of capital by the big partners is a major bet on WiMAX and means the network will likely be rolled out faster and more widespread.
So Intel swapped their wireless narrowband communication business for broadband. I kind of thought that might be their strategy. They are pure broadband now, Wifi and Wimax.
Rick, can you explain what that means. narrow band? Intel doesn’t seem to have a business in communications of any sort to be honest. They have blown it so many times, that it is hard to take any investment seriously.
Om this is very intersting. It’s well known that Clearwire is blocking other VoIP services and therefore won’t let let its customers access Skype, etc. since it sells its own bundled service. This makes me wonder where is Intel on Network Neutrality. I see a HUGE opportunity for AMD to seriously OUT Intel on what is clearly a plan to sell out customers in favor of network providers. You need to report on this.
Narrowband (narrow bandwith) typically refers to the small amount of spectrum used in normal PSTN communications, which is about 3000 Hz. Intel sold their narrowband X-scale products that were used in the RIMM and Palm Treo to Marvell for 600M.
It appears Intel is going to pursue the future of broadband communications in Wifi and Wimax. Both of these technologies will incorporate Voip, as well as data.
I suppose you could say that narrowband will someday be extinct. It won’t be anytime soon, but Intel may have conceded it to the next generation of broadband communciations technologies.
McCaw undervalued spectrum Motorola = Nextel 2.0? I think Sprint will end up buying this one eventually, too.
I Skype plenty and when in the USA I use Clearwire wherever I can get it’s signal. It does not block skype in Alaska or Washington State. Blocking VoIP is rumor not “well known”. Clearwire serves my needs very well.