Clearwire, which has largely been the 4G supplier to Sprint Nextel, sees the potential to grow by supplying wireless capacity to other companies in need.
"We want to be the Switzerland of the broadband industry," Clearwire Chief Financial Officer Hope Cochran said today during an investor conference hosted by Goldman Sachs.
The shift, however, is dependent upon Clearwire's move from its original WiMax technology to a newer version of 4G called LTE. But in order to do that, the company needs to raise an additional $600 million, on top of $150 million to $300 million to shore up its balance sheet and keep its network running, Cochran said.
Further complicating the task is pressure on the average revenue per user, which Cochran conceded would continue through the year and stabilize in 2012. Initially, Sprint would sell USB data cards and hot spots, which offered a lot of consistent usage, and more revenue to Clearwire. But the increased mix of smartphones, which uses the network more sporadically, means lower average revenue per user.
However, as product mix stabilizes and more users come on, things should get better next year, Cochran said.
For its LTE upgrade, Clearwire isn't necessarily interested in expanding into new markets, Cochran said. Instead, the company said two-thirds of the network would get the upgrade, and they would occur in high-traffic areas.
The company is taking a LightSquared-like approach in offering itself as a neutral partner. But unlike LightSquared, which is dealing with concerns over interference with GPS equipment, Clearwire has a network that's up and running.
Cochran said there was an opportunity to provide more capacity to companies, including the cable providers, which are smaller shareholders that already offer WiMax broadband service. She said that the cable companies are still trying to figure out how to include wireless as a service in their bundle, which typically include cable TV, phone, and Internet services.
On Clearwire's relationship with Sprint, Cochran said there are still opportunities to work with Sprint and play a part in its Network Vision plan, which is Sprint's road map for a more flexible next-generation network. She added there was some confusion in the market about what role Clearwire would play in Sprint's 4G plans.
Sprint is expected to provide more details for its road map on October 7.