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Clearwire Completes Transaction with Sprint Nextel and $3.2 Billion Investment to Launch 4G Mobile Internet Company
Combination of Sprint and Clearwire’s WiMAX Businesses with $3.2 Billion Cash Investment from Comcast, Intel, Time Warner Cable, Google, and Bright House Networks Creates New Opportunities for Next-Generation Services.
KIRKLAND, Wash. – Dec. 1, 2008 – 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.
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.
