Clearwire Talking With AT&T, Verizon About Wireless Accord

Clearwire Corp. (CLWR), the money-losing wireless broadband provider, is talking with companies including AT&T Inc. (T) and Verizon Wireless about selling them capacity on its network.

Clearwire is looking to expand the number of companies that buy capacity on its wireless network and then resell it under their own brand name, Chief Executive Officer Erik Prusch said today. Sprint Nextel Corp. (S), which owns about half of Clearwire, is now the company’s largest wholesale customer.

“All those discussions are under way,” Prusch said in an interview at Bloomberg headquarters in New York. “I’m confident we’ll bring in new wholesale partners. Our message to the industry is that we’ve got the capacity to handle their needs.”

Clearwire is considering new partners as it looks to raise capital to finance a shift to new wireless technology. The company has said it will spend about $600 million to add Long- Term Evolution, or LTE, technology to its network. AT&T and Verizon Wireless are both using LTE too.

“We’re talking with everybody,” said Prusch. “We want to be the Switzerland of mobile broadband.”

Sprint doesn’t object to Clearwire talking to new potential customers, said Bill White, a spokesman for Sprint.

“Their business is to be a wholesale provider of 4G capacity,” White said. “They can sell to whoever they want to. We want Clearwire to be successful.”

Clearwire’s discussions with AT&T and Verizon Wireless may be a sign Sprint isn’t going to provide Clearwire with the money it needs, said Michael Nelson, an analyst at Mizuho Securities USA Inc. Clearwire needs about $600 million dollars for LTE plus $350 million in working capital, he said.

Fundraising Options

“If Sprint is unwilling to provide them with that additional capital, they need to look elsewhere,” Nelson said in an interview.

White declined to comment on whether Sprint will provide funding for Clearwire. Mark Siegel, a spokesman for AT&T, and Jeff Nelson, a spokesman for Verizon Wireless, declined to comment.

Clearwire “does have viable fundraising options,” Ben Abramovitz, an analyst with Kaufman Brothers LP, said in a research note today. The company could raise the money through debt, equity or vendor financing, he said.

Clearwire, based in Kirkland, Washington, rose 18 cents, or 7.8 percent, to $2.50 at 4 p.m. New York time on the Nasdaq Stock Market. The stock has dropped 51 percent this year.

To contact the reporter on this story: Sarah Frier in New York at sfrier1@bloomberg.net

To contact the editor responsible for this story: Peter Elstrom at pelstrom@bloomberg.net

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