October 7, 2011

CLEARWIRE CORPORATION (CLWR): RISK HAS GONE UP

We continue to see the spectrum owned by Clearwire Corporation (CLWR) as very valuable. Our thesis has been that mobile devices will continue to proliferate requiring more and more spectrum. Sooner or later, a bigger firm requiring spectrum will turn to Clearwire.

Sprint (S) owns 54% of Clearwire. Sprint relies on Clearwire for its 4G network. Clearwire uses a technology called Wimax for 4G.

Apple (AAPL) is supporting a competing technology called LTE. Clearwire has announced that it will build an LTE network. It is not clear where Clearwire will get the money to build LTE network. … Please click here or the title below to read more.

October 7, 2011

SPRINT NEXTEL (S): OUR TAKE FROM SPRINT CONFERENCE CALL

Sprint Nextel (S ) says on the conference call that the reason for the churn was lack of iPhone. Sprint further adds that iPhone will be huge for cash flow and will be very profitable.

Sprint stock has moved up on these predictions.

We agree that iPhone will reduce churn. However it is difficult to see Sprint taking any market share away from AT&T (T) and Verizon (VZ).

There are also reports that Sprint has made a $20 billion commitment to Apple (AAPL). There are no details, so it is difficult to analyse the impact of this commitment on profitability.… Please click here or the title below to read more.

October 7, 2011