Looks like Clearwire (NSDQ: CLWR) may have found a way out of its cash bind, and its impasse with main investor Sprint: according to a report, the wireless broadband provider is planning to abandon its retail operations and move ahead as a wholesale-only operator.
The report, in the WSJ, does not give a timetable for when the retail closure would happen. Clearwire currently has 140 stores in its footprint, and a source told the newspaper that for the moment these would remain open.
We have reached out to Clearwire for comment, and will update this post as and when we hear back. Update: “We don’t have any comment on the story but we will have more information about our financial results and future plans when we announce quarterly earnings on February 17,” a spokesperson told us via email.
Clearwire, which is still trying to build out full coverage of its WiMax-based wireless broadband network, has been struggling with a cash shortfall for much of the last year. That has led to some adjustments in the company:
– In November it said it would cut 15 percent of its workforce, or 630 jobs.
– Then the company’s original strategy to cover 200 million people with its network was cut down to 120 million, according to the WSJ.
– And it is looking to sell around 20 percent of its wireless spectrum, which is worth about $2 billion; reportedly T-Mobile is one interested buyer.
Finally, following a $1.1 billion debt offering at the end of last year, the company currently has enough cash to last it to the end of 2011.
Sprint (NYSE: S), which owns 54 percent of Clearwire, was noticeably absent from that debt offering. Some speculated that it was because Sprint was unhappy with Clearwire’s business strategy, spearheaded by founder and former chairman Craig McCaw, which included a costly retail operation.
With McCaw resigning at the end of December and getting replaced by John Stanton, and now this reported move to a wholesale-only operation, some believe this will signal a change in heart from Sprint to further fund the operator.