Google to sell 6.5 percent stake in WiMAX player Clearwire at a loss of $453 million

By Telecom Lead Team: Google will sell its 6.5 percent
stake in WiMAX provider Clearwire at a loss of around $453 million.

Google will sell 29.4 million shares – at $1.60 each, or about $47 million.
That’s $453 million (91 percent) less than the $500 million Google originally
paid for the stake in 2008, according to media reports.


Chip major Intel has 7.3 percent stake in Clearwire.
Intel is the backbone of WiMAX technology initiatives. It is not known whether
Intel will be selling its stake.


Recently, WiMax Forum announced that over 823 million
people were covered by WiMAX networks at the beginning of 2011. By the end of
2011 the WiMAX Forum estimates that number to increase to more than one billion


Likewise the WiMAX subscriber base is also increasing rapidly, with service
providers such as Clearwire and UQ Communications experiencing exponential


In 1Q 2011 Clearwire grew its subscriber base by 1.8 million


In 1Q 2011 Clearwire grew its subscriber base by 1.8
million subscribers, while UQ Communications has grown in the last 6 months by
almost 300 percent.


Google will give the other Clearwire partners the
opportunity to purchase the shares beginning February 27, and then offer the
stock on the open market.


The plan to sell the stake at a significant loss is part
of Google’s plans to periodically rebalance its investments based on its goals
and its evaluation of market conditions.


Google was one of the original investors in Clearwire –
along with Sprint, Comcast, Intel, Time Warner Cable and Bright House Networks
– that kicked in about $3.2 billion to help the fledgling company build WiMax
network in 2008.


Clearwire’s WiMAX venture could not take off due to
financial constraints and the emergence of LTE as the network architecture of


All of the cable partners declined to continue funding
Clearwire, which received a last minute cash infusion from its largest partner
Sprint in November.

According to Clearwire’s annual report, Sprint has the largest voting share in
the company with about 49 percent, followed by Intel (7.3 percent); Comcast
(6.9 percent); Time Warner Cable (3.6 percent); Eagle River Holdings (2.6
percent); and Bright House (0.7 percent).


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