That was quick. One day after announcing the final details to its public offering, Clearwire(s clwr) has closed on the stock deal, raising $402.5 million in new funds, which immediately triggered its agreement with Sprint(s s) to kick in $331.4 million equity investment so it can maintain its near-majority stake in the WiMAX operator. What’s next? Why building its new LTE network, of course.
Clearwire said it would use the funds for operations and maintenance as well as new network construction, but the first priority on its list must be starting the rollout of its time-division LTE network (TD-LTE). Clearwire has said it needs $600 million to overlay TD-LTE in its current 72-market WiMAX footprint. After paying fees to its underwriters, Clearwire will have $715.5 million in the bank – enough to build phase one and give Sprint the capacity it needs to supplement its own LTE network when it finally launches in 2012. Here’s what Clearwire president and CEO Erik Prusch had to say in a statement:
“This equity raise is a critical step for Clearwire to achieve its long-term business plan of creating the first wide-channel TDD-LTE 4G network in the U.S The added resources will enable us to continue delivering 4G mobile broadband service to meet the rapidly growing demand in the industry. We remain ideally and uniquely positioned to serve both wholesale and retail customers well into the future.”
Wholesale customer is more like it. The new TD-LTE network will be limited to hot zones and won’t cover entire cities, which is perfect for Sprint’s 4G plans but not exactly ideal for any wholesale customer without an LTE network of its own. But as I detailed in my recent Sprint-Clearwire analysis, Clearwire has the resources to build Sprint one hell of network – it just needs the cash.