Time Warner Cable Inc.
) has decided to sell its 7.8% stake in
) for a nationwide WiMAX network. In November 2008, Time Warner
Cable acquired 46.4 million shares of Clearwire for $550 million.
Clearwire has formed a venture combining its infrastructure
together with the wireless network of
Sprint Nextel Corp.
) to install a nationwide mobile phone and broadband Internet
network using the 4G WiMAX technology. However, WiMAX gradually
lost its charm among the customers as its competitive 4G LTE
technology becomes more robust and faster downlink.
Consequently, the Clearwire venture always remains loss making.
Time Warner Cable's stake is currently valued at around $71.5
million, indicating a substantial loss of $478.5 million.
) injected $1.05 billion in Clearwire venture and at present holds
88 million shares. Another cable operator Bright House network also
invested $100 million in it. The major reason for the cable
operators to invest in the Clearwire venture is that it will enable
them to offer wireless services together with their triple-play
video, Internet, and wireline phone services.
In July 2012, Time Warner Cable, Comcast, and Bright House
entered into an agreement with Verizon Wireless to sell their
respective AWS spectrums, which they bought in an auction in 2006.
Verizon Wireless is a joint venture between
Verizon Communications Inc.
Vodafone Group plc.
). Recently, the deal got regulatory approval.
Time Warner Cable sold its wireless spectrums to Verizon
Wireless for approximately $1.1 billion. Furthermore, a reseller
agreement with Verizon Wireless will enable the company to offer
highly demanded 4G LTE services to its customers. This agreement
thus eliminates the company's need to continue with loss making
Clearwire venture. Furthermore, we believe a tacit price agreement
between the two entities, where their video offerings are
overlapping, will be immensely beneficial for Time Warner
CLEARWIRE CORP (CLWR): Free Stock Analysis
COMCAST CORP A (CMCSA): Free Stock Analysis
SPRINT NEXTEL (S): Free Stock Analysis Report
TIME WARNER CAB (TWC): Free Stock Analysis
VODAFONE GP PLC (VOD): Free Stock Analysis
VERIZON COMM (VZ): Free Stock Analysis Report
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