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Clearwire rallies on subs growth, MetroPCS deal talk

Posted by | October 14, 2011 .


By Sinead Carew

NEW YORK |
Thu Oct 13, 2011 5:03pm EDT

NEW YORK (Reuters) – Clearwire Corp reported (CLWR.O) better-than-expected subscriber numbers on Thursday, while MetroPCS Communications (PCS.N) said it is interested in spectrum deal with the wireless telecommunications company.

The numbers and Clearwire’s preliminary third-quarter results, seemed to ease concerns about the company, which has been the subject of bankruptcy speculation.

Shares in Clearwire, which is majority-owned by Sprint Nextel (S.N), rose 26 percent. They had lost about a third of their value last Friday after Sprint, Clearwire’s biggest customer, said it could benefit from a Clearwire bankruptcy.

This comment and Sprint’s announcement that it will not sell phones that run on Clearwire’s WiMax network after 2012 led to fears that Sprint no longer wants to support Clearwire.

Besides the subscriber numbers, Clearwire also reported a strong-than-expected cash position.

Also on Thursday, MetroPCS’ finance chief told an investor conference that his company was “uniquely positioned” to make a spectrum deal with Clearwire.

A MetroPCS spokesman said Clearwire is just one option, but investors saw the comment as positive.

“A wholesale agreement with MetroPCS would be a significant positive for Clearwire,” CreditSuisse analyst Jonathan Chaplin said in a research note.

Clearwire has said it is in talks with U.S. operators about renting space on its network, particularly where there is a high demand for services like mobile Web surfing. It has also said that it would entertain offers to buy its spectrum.

Clearwire depends almost entirely on subscriber growth from Sprint, which uses Clearwire’s network for its high-speed wireless offerings. Chaplin said Clearwire needs more wholesale partners because Sprint is planning to upgrade its network to lessen its dependence on Clearwire.

Nelson said the wholesale numbers gave him confidence that Sprint will need to work with Clearwire in the future, said Mizuho analyst Michael Nelson.

STRONG GROWTH, SPECTRUM INTEREST

Clearwire

Article source: Read more

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