Clearwire (MM) (NASDAQ:CLWRD)
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Clearwire Corporation (NASDAQ:CLWRD for the first 20 trading days and
CLWR thereafter) today announced that it has completed the transaction
with Sprint Nextel Corporation (NYSE:S) to combine their next-generation
wireless Internet businesses. The new company retains the Clearwire name
and expects to build the first nationwide 4G mobile broadband network
focused on meeting the evolving needs and demands for Internet-based
communications services. In addition, Clearwire has received a $3.2
billion investment from Comcast, Intel, Time Warner Cable, Google and
Bright House Networks. The transaction with Sprint and the new cash
investment were completed on the terms originally announced on May 7,
2008.
“As we roll out our network across the country, people will no longer
have to make the choice between speed and mobility. We are bringing a
new mobile Internet experience to customers at speeds previously
relegated to fixed locations,” said Benjamin G. Wolff, chief executive
officer of Clearwire. “With significant spectrum holdings yielding
unmatched network capacity, a next-generation all-IP network, and an
open Internet business model, Clearwire will deliver a simple value
proposition aimed to improve productivity and make the Internet
experience more enjoyable, wherever our customers happen to be.”
“With the global economic challenges ahead for consumers and businesses
next year, we believe it’s important to invest in those infrastructure
improvements that can propel the U.S. forward and stimulate innovation,”
continued Wolff. “Today is just the beginning. Over the coming years, as
Clearwire rolls out ultra high-speed mobile Internet services across the
country, we expect to be well positioned to transform the communications
landscape.”
Clearwire Chairman, Craig O. McCaw said, “This is not simply about a
time-to-market advantage, but about having an amazing block of spectrum
that is unencumbered by legacy commercial uses and technology. It is a
chance to do something right the first time, with simplicity and
incredible efficiencies. We are building a wireless broadband network
that will stand the test of both time and competition. This is far and
away the most exciting opportunity in wireless I have seen since the
beginning of cellular in 1983.”
“This is the beginning of a new chapter in wireless that leverages
Sprint’s investment in 4G to profoundly change how people and businesses
send, receive and use information,” said Dan Hesse, chief executive
officer of Sprint and member of Clearwire’s Board of Directors. “As the
largest shareholder in Clearwire, Sprint is uniquely positioned to
provide customers with both the largest and most dependable 3G network
in America and access to the nation’s first 4G mobile broadband network.”
New Investors
Clearwire received the $3.2 billion investment from some of the most
innovative communications, entertainment, and technology companies in
the world, including: Comcast, Intel through Intel Capital, Time Warner
Cable, Google, and Bright House Networks, and, as previously announced,
will receive an additional investment from Trilogy Equity Partners in
the coming months.
Brian L. Roberts, chairman and chief executive officer of Comcast
Corporation said, “We look forward to providing our customers with
exciting high speed mobile products. Our customers want access to the
most innovative products both in and outside the home. With our new
partners, we will deliver integrated mobile high speed Internet products
for years to come.”
“Clearwire represents a significant move forward for 4G wireless
technology in the U.S.,” said Paul Otellini, Intel president and chief
executive officer. “WiMAX is the right combination of industry leaders
and technology needed to meet the growing demand for more powerful,
flexible mobile broadband solutions today. The investments made by Intel
Capital around the globe demonstrate our continued commitment to
redefine the way people enjoy the Internet on the go.”
Glenn Britt, president and chief executive officer of Time Warner Cable
said, “We connect our customers with entertainment, information and each
other; any time, anywhere, on any device. Our investment in Clearwire
will help us further that goal by adding value and creating a seamless
Time Warner Cable experience.”
“People should be able to access the Internet anytime, regardless of
where they are or what device they choose to use,” said Eric Schmidt,
chief executive officer and chairman of Google. “We are pleased that
Clearwire's mobile WiMAX network will soon offer high speed broadband
that will allow subscribers to be online in a greater number of places
and on a larger variety of devices.”
Robert J. Miron, chairman of Bright House Networks said, "Bright House
Networks is proud to join this strong set of partners in Clearwire. We
are enthused to be part of this advanced 4G wireless deployment bringing
subscribers the highest throughput mobility solution on the market
today."
Spectrum Yields Unmatched Wireless Network Capacity
Clearwire’s open all-IP network utilizes mobile WiMAX technology,
providing customers with average download speeds initially of 2-4
megabits per second and peak rates that are considerably faster.
However, the company noted that its spectrum holdings are what provide
Clearwire with real differentiation in that it enables the company to
provide true, mobile broadband services. At the closing, Sprint
contributed its entire 2.5 GHz spectrum holdings to Clearwire. With this
combined spectrum portfolio, Clearwire now has 100 MHz or more of
optimal 4G spectrum in most markets across the U.S.
“In the landline world, service providers can’t deliver broadband
without a big enough ‘pipe,’ and in the wireless world that means having
enough of the right kind of spectrum,” continued Wolff. “Our significant
spectrum holdings provide Clearwire with unmatched, dedicated network
capacity for data services that will enable us to deliver true, mobile
broadband services in ways never before possible.”
Let’s Be Clear
The company also announced today that, while its company name will
remain Clearwire, its new mobile WiMAX services will be branded Clear™.
The Clear™ brand will apply to all new mobile WiMAX services to be
offered by Clearwire in the U.S. and will be phased in to those markets
where Clearwire offers pre-WiMAX services, as these existing markets are
upgraded to mobile WiMAX technology.
In the coming months, the Clear brand will replace the XOHM service name
previously used by Sprint Nextel in the Baltimore, Md. market. Clearwire
expects current XOHM customers will not experience any impact as a
result of the transaction, and they will continue to enjoy the current
benefits of various notebook computing, portable multimedia and Internet
devices, service plans and features.
In addition, the company unveiled a new marketing tagline, “Let’s Be
Clear,” that will be used in conjunction with the new Clear service
brand in upcoming market launches. The new marketing efforts will
clearly communicate the service’s unprecedented combination of speed,
mobility and simplicity.
Company Management and Board of Directors
Benjamin G. Wolff will continue to serve as Clearwire’s chief executive
officer, and Perry Satterlee continues as the company’s chief operating
officer. Sprint’s two most senior WiMAX leaders have joined Clearwire’s
management team. Barry West, who served as Sprint’s chief technology
officer and XOHM business unit leader, is now president and chief
architect of Clearwire, and Atish Gude, formerly senior vice president
of Sprint’s XOHM mobile broadband operations, is now senior vice
president and chief marketing officer of Clearwire.
Clearwire’s Board of Directors will initially have eight members.
Clearwire founder and wireless pioneer, Craig McCaw, is non-executive
chairman of the board. Along with McCaw, other directors are Dan Hesse,
Sprint's chief executive officer; Keith Cowan, Sprint’s president,
strategy and corporate development; John Stanton, chairman and chief
executive officer of Trilogy Equity Partners and former chairman and
chief executive officer of VoiceStream and Western Wireless; Sean
Maloney, executive vice president, chief sales and marketing officer of
Intel; Frank Ianna, former president of network services for AT&T; Jose
A. Collazo, former head of BT Global Services and former chairman,
president and chief executive officer of Infonet Services Corporation;
and Dennis Hersch, former global chairman of mergers and acquisitions
for JP Morgan. An additional five seats on the board are expected to be
filled in the coming weeks.
Clearwire remains headquartered in Kirkland, Wash. It will continue to
have a focused technology and east coast deployment presence in Herndon,
Va.
Terms of the Transaction
Shares of old Clearwire’s Class A Common Stock, together with all
outstanding options, restricted stock units and warrants to purchase
shares of old Clearwire common stock, have been converted into an
equivalent number of new shares, options, restricted stock units or
warrants, respectively, in the new company.
With the closing, Sprint contributed all of its 2.5 GHz spectrum and its
WiMAX-related assets, including its XOHM business, to Clearwire. The
implied equity valuation of Sprint’s contribution will result in
approximately 51 percent ownership on a fully diluted basis, based on
the initial target price of $20.00 per share.
Intel Corporation (NASDAQ:INTC) through Intel Capital, Google Inc.
(NASDAQ:GOOG), Comcast Corporation (NASDAQ:CMSCA, CMCSK), Time Warner
Cable Inc. (NYSE:TWC), and Bright House Networks, LLC – have
collectively invested $3.2 billion in Clearwire and its operating
subsidiary. As a group, these investors initially acquired approximately
22 percent of the new Clearwire and its operating subsidiary on a fully
diluted basis at the initial investment price of $20.00 per share,
subject to a post-closing adjustment described below. Comcast invested
$1.05 billion, Intel Capital invested $1.0 billion in addition to its
previous investments made in Clearwire, Time Warner Cable invested $550
million, Google invested $500 million, and Bright House Networks
invested $100 million, for an aggregate total of $3.2 billion. The
investments by Intel Capital, Comcast, Time Warner Cable and Bright
House Networks and the contributions of assets from Sprint described
above were made into a limited liability company subsidiary of
Clearwire. Google invested directly in Clearwire and acquired new
Clearwire Class A Common Stock. In a separate transaction to occur 90
days after closing, Trilogy Equity Partners will invest $10 million in
the purchase of shares of new Clearwire Class A Common Stock on the same
pricing terms as the other investors.
A post-closing adjustment to the price paid by the new investors other
than Sprint will be made 90 days following the closing, which will be
based upon the average trading price of Clearwire Class A Common Stock
over 15 randomly selected trading days during the 30-trading day period
ending on the 90th day after the closing date. The price per share will
be based upon the volume weighted average price per share on such days
and is subject to a cap of $23.00 per share and a floor of $17.00 per
share. The fully-diluted ownership percentages of the new Clearwire held
by Clearwire’s current shareholders, Sprint and the new investors will
be determined once the adjustment, if any, occurs.
On November 28, 2008, in connection with the consummation of the
transactions, the company filed a Form 25 with the Securities and
Exchange Commission (“SEC”) to complete the voluntary delisting of the
predecessor Clearwire Corporation’s Class A common stock from the NASDAQ
Stock Market, which will become effective 10 days after the filing date.
When that occurs, the company intends to file a Form 15 with the SEC to
suspend its predecessor’s obligation to file reports under the
Securities Exchange Act of 1934. Clearwire’s new Class A Common Stock
will temporarily trade under the symbol CLWRD for 20 trading days before
switching to CLWR.
Note to Media: Clearwire
will host a conference call for press and analysts today, December 1,
2008, at 7am PT/10am ET. To access today's conference call, please call
866-783-2140 or outside the U.S., dial 857-350-1599. The passcode for
the call is 41467097. A simultaneous webcast can be accessed via the
Internet at http://investors.clearwire.com.
The conference call will be archived and available for replay until
midnight Eastern Time (9 p.m. Pacific Time), on Monday, December 15,
2008. To access the replay, please call 888-286-8010 or outside the
United States, dial 617-801-6888. The replay passcode is 67750421.
A news package of B-roll including CEO sound bites, product shots, and
more will be available via satellite during two separate times today:
December 1, 7:05 a.m. PT/10:05 am ET
December 1, 10:00 a.m. PT/1:00 p.m. ET
Galaxy 17, Transponder 19, Slot A
Orbital 91 degrees
Uplink frequency 6291.500 vertical
Downlink frequency 4066.500 horizontal
FEC 3/4, symbol rate 6.113
8.448 data rate
Additional information is available at www.Clearwire.com.
About Clearwire
Clearwire, (NASDAQ:CLWRD for the first 20 trading days and CLWR
thereafter), offers a robust suite of advanced high-speed wireless
broadband services to consumers and businesses. Clearwire’s open all-IP
network, combined with significant spectrum holdings, provides unmatched
network capacity to deliver next generation Internet access and
applications. The company is building the first, nationwide 4G mobile
Internet network, bringing together an unprecedented combination of
speed and mobility. Investors include Sprint Nextel Corporation, Comcast
Corporation, Intel through Intel Capital, Time Warner Cable, Google and
Bright House Networks. Clearwire currently provides mobile WiMAX-based
service in Baltimore, Md., and provides pre-WiMAX services in 50 markets
across the U.S. and Europe. Headquartered in Kirkland, Wash., additional
information about Clearwire is available at www.clearwire.com.
About Sprint Nextel
Sprint Nextel offers a comprehensive range of wireless and wireline
communications services bringing the freedom of mobility to consumers,
businesses and government users. Sprint Nextel is widely recognized for
developing, engineering and deploying innovative technologies, including
two wireless networks serving nearly 51 million customers at the end of
the third quarter 2008; industry-leading mobile data services; instant
national and international push-to-talk capabilities; and a global Tier
1 Internet backbone. For more information, visit www.sprint.com.
About Comcast Corporation
Comcast Corporation (Nasdaq:CMCSA, CMCSK) (www.comcast.com)
is the nation's leading provider of entertainment, information and
communication products and services. With 24.4 million cable customers,
14.7 million high-speed Internet customers, and 6.1 million Comcast
Digital Voice customers, Comcast is principally involved in the
development, management and operation of broadband cable systems and in
the delivery of programming content.
Comcast's content networks and investments include E! Entertainment
Television, Style Network, Golf Channel, VERSUS, G4, PBS KIDS Sprout, TV
One, ten Comcast SportsNet networks and Comcast Interactive Media, which
develops and operates Comcast's Internet businesses, including
Comcast.net (www.comcast.net).
Comcast also has a majority ownership in Comcast-Spectacor, whose major
holdings include the Philadelphia Flyers NHL hockey team, the
Philadelphia 76ers NBA basketball team and two large multipurpose arenas
in Philadelphia.
About Intel Capital and Intel
Intel Capital, Intel's global investment organization, makes equity
investments in innovative technology start-ups and companies worldwide.
Intel Capital invests in a broad range of companies offering hardware,
software, and services targeting enterprise, home, mobility, health,
consumer Internet, semiconductor manufacturing and cleantech. Since
1991, Intel Capital has invested more than US$7.5 billion in
approximately 1,000 companies in 45 countries. In that timeframe, 168
portfolio companies have gone public on various exchanges around the
world and 212 were acquired or participated in a merger. In 2007, Intel
Capital invested about US$639 million in 166 deals with approximately 37
percent of funds invested outside the United States. For more
information on Intel Capital and its differentiated advantages, visit www.intelcapital.com.
Intel, the world leader in silicon innovation, develops technologies,
products and initiatives to continually advance how people work and
live. Additional information about Intel is available at www.intel.com/pressroom.
About Google Inc.
Google's innovative search technologies connect millions of people
around the world with information every day. Founded in 1998 by Stanford
Ph.D. students Larry Page and Sergey Brin, Google today is a top web
property in all major global markets. Google's targeted advertising
program provides businesses of all sizes with measurable results, while
enhancing the overall web experience for users. Google is headquartered
in Silicon Valley with offices throughout the Americas, Europe and Asia.
For more information, visit www.google.com.
About Time Warner Cable
Time Warner Cable is the second-largest cable operator in the U.S., with
technologically advanced, well-clustered systems located mainly in five
geographic areas -- New York state (including New York City), the
Carolinas, Ohio, southern California (including Los Angeles) and Texas.
As of March 31, 2008, Time Warner Cable served approximately 14.7
million customers who subscribed to one or more of its video, high-speed
data and voice services, representing approximately 33 million revenue
generating units.
About Bright House Networks (BHN)
Bright House Networks is the nation's 6th largest MSO with 2.4 million
customers in several large markets including Bakersfield, California;
Birmingham, Alabama; Detroit, Michigan; Indianapolis, Indiana; Orlando,
Florida (Central Florida Division) and Tampa Bay, Florida along with
several other smaller systems in Alabama and the Florida Panhandle. The
high-growth Tampa/Central Florida markets are contiguous and form one of
the country's largest cable clusters. BHN's corporate locations are in
Syracuse, New York and Orlando, Florida.
Cautionary Statement Regarding Forward-Looking Statements
This press release contains “forward-looking statements” within the
meaning of the securities laws. The statements in this release regarding
anticipated benefits of the transaction with Sprint; plans for the
development and deployment of the first nationwide next-generation
wireless broadband network based on mobile WiMAX technology; the timing,
availability, capabilities and coverage of our network; products and
services to be offered on our network; planned marketing and branding
efforts and other statements that are not historical facts are
forward-looking statements. The words “will,” “would,” “may,” “should,”
“estimate,” “project,” “forecast,” “intend,” “expect,” “believe,”
“target,” “designed” and similar expressions are intended to identify
forward-looking statements. Forward-looking statements are projections
reflecting management’s judgment and assumptions based on currently
available information and involve a number of risks and uncertainties
that could cause actual results to differ materially from those
suggested by the forward-looking statements.
Future performance cannot be assured. Actual results may differ
materially from those in the forward-looking statements due to a variety
of factors, including, but not limited to:
the ability of the company to successfully integrate the operations,
technologies, products and services of Clearwire and Sprint’s wireless
Internet business;
the costs and business risks associated with deploying our network and
offering products and services utilizing mobile WiMAX technology;
the availability of additional financing on acceptable terms;
the ability of third-party suppliers, software developers and other
vendors to perform requirements and satisfy obligations necessary to
create products and software designed to support desired features and
functionality;
the impact of adverse network performance;
actions by regulatory agencies; and
other risks referenced in the section of Clearwire’s proxy
statement/prospectus entitled “Risk Factors”, which was filed on Form
S-4 with the Securities and Exchange Commission (File No. 333-153128).
Clearwire believes the forward-looking statements in this release are
reasonable; however, you should not place undue reliance on
forward-looking statements, which are based on current expectations and
speak only as of the date of this release. Clearwire is not obligated to
publicly release any revisions to forward-looking statements to reflect
events after the date of this release.