Clearwire is the odd duck of the telecommunications landscape. The company's initial base technology was a form of 4G called WiMax. The problem was that it was the only major telecommunications carrier that put its eggs in the WiMax basket. All of the other carriers picked Long Term Evolution (LTE).
The story could have ended there: A bad bet and a bankruptcy or some other end-of-corporate-life event.
That didn't happen. A long journey, rife with upper management changes and other ups and downs, has seen the company make the transition to LTE. Last week, according to Computerworld and other sites, Clearwire said it plans to create LTE "hot zones" in parts of 31 cities, including New York, Los Angeles, Chicago and San Francisco. The announcement during a discussion of the company's first quarter results, which were good:
For the first quarter, Clearwire posted a 36 percent gain in revenue from a year earlier and reported it reached 11 million subscribers to its current WiMax service, up from 6.1 million a year earlier. Those subscribers are using the service more heavily than ever, with average smartphone data use up 53 percent from the first quarter of 2011.
The story added that Clearwire still lost $182 million, but netted cash - $66 million - for the first time.
A long and insightful piece at Seeking Alpha sheds a bright light on the company through the prism of the spectrum that it holds. The basic idea is that Clearwire has great value because it controls a lot of that precious commodity:
Currently, Clearwire holds 46.6 billion MHz-POP's of spectrum. That is enough spectrum to allow Clearwire to have the deepest spectrum holdings in the United States' top 100 wireless markets, outranking AT&T (T), Verizon (VZ), T-Mobile, and partner Sprint (S).
Clearwire's vast spectrum holdings provide a floor for the shares, because their true value is far greater than the $4 billion that is currently carried on the company's balance sheet. The writer of the piece (which unfortunately has no byline) provides a detailed analysis of the spectrum wars. A good analogy is that no matter how dilapidated a home overlooking the Pacific Ocean is, it has great value - even if the new owners intend to raze it and start over. That's not a perfect analogy, because the writer is not saying that he believes Clearwire is poorly or well run. Rather, it is the idea that holding so much spectrum means that a floor value of the company is guaranteed.
The Motley Fool looked at Clearwire earlier this month. The author suggested that the company is doing some creative things that could take some customers away from the other players. He, too, alluded to its expansive spectrum holdings. The story also pointed out that Clearwire will benefit from the terrible and probably fatal problems encountered by LightSquared in general and the abandonment of the deal between the troubled company and Sprint in particular.
Clearwire has the look of a company that has stared its demise in the face and soldiered on. Whether it will be a successful player in the LTE world remains uncertain, of course. But the fact that it still is in the game clearly shows that it is a survivor.