Clearwire expanded its network footprint in the Bay Area and got a public relations boost from Comcast restating its commitment to reselling the service under the Xfinity brand, all of which did nothing to compensate for the damage following the announcement that key investor Intel would sell 10 million shares in the WiMAX services provider.
These developments all contributed to the swirl of speculation about Clearwire’s fate. Clearwire continues to lose money. The company has always said that if necessary, it could upgrade its WiMAX network to LTE, and it is conducting trials demonstrating that such an upgrade can be successfully accomplished. Preliminary reports from those trials are positive.
Intel integrates WiMAX support in many of its computer chips, which are then built into electronic devices. If Clearwire were to shift to LTE, that makes Intel’s investment in Clearwire somewhat less valuable.
So when Intel said it would sell 10 million shares – about 10 percent of its holdings in Clearwire (and about 1 percent of all Clearwire stock) – that inspired a general sell-off that at press time had diminished the value of Clearwire’s stock by about 10 percent.
The share sale “does not affect any contractual obligations or business arrangements between Intel and Clearwire,” Intel said in a regulatory filing made public yesterday.
None of that is stopping Clearwire from extending its 4G network to cover more of San Francisco, as well as communities to the south in Silicon Valley and to the east across San Francisco Bay.
Another 120,000 potential consumers are now encompassed in Clearwire’s coverage in the area, for a total of about 4.4 million, the company said.
Two other Clearwire investors said they will be reselling the service, Comcast under its Xfinity Internet 2go brand and Sprint as Sprint 4G.
“Comcast continues to drive innovation in the market by giving customers ways to extend its services to anywhere they work, live and play,” said Curt Henninger, regional senior vice president for Comcast California. “The expansion of Xfinity Internet 2go in the Bay Area is another example of our focus in providing customers with an enhanced experience.”