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Clearwire Doubles Revenues
By Josh Long
January 24, 2012 - News
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Clearwire Corp., the wireless operator that has a close relationship with Sprint Nextel Corp., anticipates doubling its fourth-quarter revenues over the year-ago period.

In its preliminary financial and operating results, the high-speed wireless operator on Tuesday reported revenues of $362 million. That's up from $180.7 million in the fourth quarter of 2010.

Clearwire added an estimated 900,000 wholesale customers in the latest quarter and anticipates ending the 2011 year with 10.4 million customers, consisting of 9.1 million wholesale customers and 1.3 million retail customers. Most of Clearwire's growth is through its wholesale business by which it leases its WiMAX network to Sprint and others.

In other news, Clearwire announced a plan to offer $300 million of senior secured notes to qualified institutional buyers. The offering will help Clearwire raise capital to support its network transition to LTE, the 4G technology that wireless operators around the world are increasingly embracing.

The company has revealed that the LTE overlay of its WiMAX network will cost $600 million, according to Moody's Investors Service, the credit-rating agency.

"Clearwire's note offering, in addition to the common equity recently raised, provides the Company with much-needed capital to begin its deployment of LTE as well as to cover its high fixed costs," said Dennis Saputo, Moody's Senior Vice President, in a statement.

Moody's estimates that Clearwire's annual fixed costs total around $1.2 billion and anticipates that the wireless operator will need to raise additional capital in the second half of the year. "This additional funding could be raised through the sale of spectrum, vendor financing or additional debt and/or equity," said the credit-rating agency.

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