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8-K - FORM 8-K - Clearwire Corp /DE | v58996e8vk.htm |
Exhibit 99.1
For Release April 19, 2011
6:00 AM Pacific
6:00 AM Pacific
Sprint and Clearwire Announce Key Enhancements to Their Long-Term Wholesale Revenue Agreements |
| Companies Amend Long-Term Agreement for Wholesale Pricing for Sprints 4G Smartphones and All Other 4G Services, Including a Minimum Cash Commitment Totaling at Least $1 Billion to be Paid to Clearwire During 2011 and 2012 | ||
| Sprint and Clearwire to Collaborate on Solutions to Enhance 4G Network Coverage for Enterprise and Government Customers | ||
| Sprint and Clearwire Expand Re-Wholesaling Rights of 4G and 3G Networks |
Overland Park, Kan. and Kirkland, Wash. April 19, 2011 Sprint Nextel (NYSE:S) and Clearwire
(NASDAQ: CLWR) today announced an amendment to their long-term agreement that establishes new
wholesale pricing terms and provides Clearwire a minimum of $1 billion from Sprint to be paid
during 2011 and 2012 for 4G wholesale services comprised of minimum usage commitments of $300
million in 2011, $550 million in 2012 and $175 million in pre-payments for 4G wholesale services to
be used in 2011, 2012 and beyond. The parties expect the agreement to continue to drive the growth
and collaboration of both companies strategic 4G initiatives.
We are pleased to reach this wholesale pricing agreement with Clearwire, said Dan Hesse, Sprint
CEO. We look forward to working with them under this new agreement to provide an expanded
offering of 4G capabilities and solutions for Sprint customers.
Sprint has been our biggest and most important customer and partner since we launched 4G services
in the U.S. more than two years ago, said John Stanton, Clearwires interim CEO. Todays
agreement further aligns Sprint and Clearwires interests and lays the foundation for a continued,
constructive relationship. We are pleased to have the resources and partnerships necessary to
maintain our 4G leadership and leverage our significant spectrum and capacity for delivering mobile
broadband services.
4G PRICING AND REVENUE COMMITMENTS
In
addition to Sprints commitment of $300 million in 2011,
$550 million in 2012, and the prepayment of $175
million, the companies reached an agreement regarding wholesale pricing for Sprint devices that
operate on both Sprints 3G network and Clearwires 4G network. This includes smart phones such as
the awardwinning HTC EVO 4G and Samsung Epic 4G and other dual-mode devices like the newly
introduced Novatel Wireless MiFi® 3G/4G Mobile Hotspot 4082.
The agreement includes usage based pricing and volume discounts and is aimed at aligning the
interests of both companies to enable growth for customers using smart phones and dual-mode
devices. The agreement also includes minimum payments per 4G device.
Clearwire and Sprint also plan further collaboration to expand Sprints capability to offer
customized solutions using 4G technology. This is expected to allow Sprint to better serve its
target enterprise and government customers with mission critical wireless broadband solutions both
for mobility and local area network applications and expand its Machine-to-Machine (M2M) solutions
for large and small businesses.
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The agreement also expands the mutual re-wholesaling rights whereby both companies can resell the
others respective 3G and 4G networks to other parties. The agreement is expected to open up new
market segments for both Sprint and Clearwire to both jointly and independently pursue.
HISTORIC PARTNERSHIP
The long-term partnership between Sprint and Clearwire has been one of the most productive in the
U.S. wireless market. Together, the two companies deployed the first true 4G network in North
America, leading the wireless industrys rapid progression to a mobile broadband future while
making 4G a household word. The Clearwire 4G network is backed by some of the leading companies in
telecommunications and technology, including Comcast, Time Warner Cable, Intel, Google and Bright
House Networks.
With flexible all-IP network architecture and substantial wireless spectrum depth, the Clearwire 4G
network is well positioned to continue serving the companys customers and wholesale partners
demands for fast, reliable, high-capacity mobile broadband service across the U.S.
About Sprint Nextel
Sprint Nextel offers a comprehensive range of wireless and wireline communications services
bringing the freedom of mobility to consumers, businesses and government users. Sprint Nextel
served more than 49.9 million customers at the end of 2010 and is widely recognized for developing,
engineering and deploying innovative technologies, including the first wireless 4G service from a
national carrier in the United States; offering industry-leading mobile data services, leading
prepaid brands including Virgin Mobile USA, Boost Mobile, and Assurance WirelessSM;
instant national and international push-to-talk capabilities; and a global Tier 1 Internet
backbone. Newsweek ranked Sprint No. 6 in its 2010 Green Rankings, listing it as one of the
nations greenest companies, the highest of any telecommunications company. You can learn more and
visit Sprint at www.sprint.com or www.facebook.com/sprint and www.twitter.com/sprint.
About Clearwire
Clearwire Corporation (NASDAQ: CLWR), through its operating subsidiaries, is a leading provider of
wireless broadband services. Clearwires 4G network is currently available in areas of the U.S.
where 120 million people live. Clearwires open all-IP network, combined with significant spectrum
holdings, provides an unprecedented combination of speed and mobility to deliver next generation
broadband access. The company markets its 4G service through its own brand called CLEAR®
as well as through its wholesale relationships with companies such as Sprint, Comcast, Time Warner
Cable, and Best Buy. Strategic investors include Intel Capital, Comcast, Sprint, Google, Time
Warner Cable, and Bright House Networks. Clearwire is headquartered in Kirkland, Wash. Additional
information is available at www.clearwire.com.
Clearwire, CLEAR, and the CLEAR logo are trademarks or registered trademarks of Clearwire
Communications LLC in the United States and/or other countries. All other company or product names
are trademarks of their respective owners.
Forward-Looking Statements
This release, and other written and oral statements made by Clearwire from time to time, contains
forward-looking statements which are based on managements current expectations and beliefs, as
well as on a number of assumptions concerning future events made with information that is currently
available. Forward-looking statements may include, without limitation, managements expectations
regarding future financial and operating performance and financial condition;
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proposed transactions; network development and market launch plans; strategic plans and objectives;
industry conditions; the strength of the balance sheet; and liquidity and financing needs. The
words will, would, may, should, estimate, project, forecast, intend, expect,
believe, target, designed, plan and similar expressions are intended to identify
forward-looking statements. Readers are cautioned not to put undue reliance on such forward-
looking statements, which are not a guarantee of performance and are subject to a number of
uncertainties and other factors, many of which are outside of Clearwires control, which could
cause actual results to differ materially and adversely from such statements. Some factors that
could cause actual results to differ are:
| We have a history of operating losses and we expect to continue to realize significant net losses for the foreseeable future. |
| If our business fails to perform as we expect, we may require substantial additional capital, which may not be available on acceptable terms or at all. |
| Our current plans, and our expectations about becoming EBITDA and cash flow positive, are based on a number of assumptions about our future performance, which may prove to be inaccurate, such as our ability to substantially expand our wholesale business and implement various cost savings initiatives. |
| We regularly evaluate our plans, and we may elect to pursue new or alternative strategies which we believe would be beneficial to our business, including among other things, expanding our network coverage to new markets, augmenting our network coverage in existing markets, changing our sales and marketing strategy and or acquiring additional spectrum. Such modifications to our plans could significantly change our capital requirements. |
| We have deployed a wireless broadband network based on mobile WiMAX technology, and would incur significant costs to deploy alternative technologies. Additionally, such alternative technologies may not perform as we expect on our network and deploying such technologies would result in additional risks to the company, including uncertainty regarding our ability to successfully transition from the current technology to the new technology without disruptions to customer service. |
| We may experience difficulties in maintaining and upgrading our networks, which could adversely affect customer satisfaction, increase subscriber churn and costs incurred, and decrease our revenues. |
| We currently depend on our commercial partners to develop and deliver the equipment for our legacy and mobile WiMAX networks. |
| Many of our competitors are better established and have significantly greater resources, and may subsidize their competitive offerings with other products and services. |
| Our substantial indebtedness and restrictive debt covenants could limit our financing options and liquidity position and may limit our ability to grow our business. |
| Sprint Nextel Corporation owns a majority of our shares, resulting in Sprint holding a majority voting interest in the Company, and Sprint may have, or may develop in the future, interests that may diverge from other stockholders. |
| Future sales of large blocks of our common stock may adversely impact our stock price. |
For a more detailed description of the factors that could cause such a difference, please refer to
Clearwires filings with the Securities and Exchange Commission, including the information under
the heading Risk Factors in our Annual Report on Form 10-K filed on February 22, 2011.Clearwire
assumes no obligation to update or supplement such forward-looking statements.
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995
This news release includes forward-looking statements within the meaning of the securities laws.
The statements in this news release regarding network performance, coverage and capabilities,
business and network efficiencies, including expected financial savings, new
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technologies, products and services, and environmental sustainability, as well as other statements
that are not historical facts, are forward-looking statements. The words estimate, project,
forecast, intend, expect, believe, target, and similar expressions are intended to
identify forward-looking statements. Forward-looking statements are estimates and projections
reflecting managements judgment based on currently available information and involve a number of
risks and uncertainties that could cause actual results to differ materially from those suggested
by the forward-looking statements. With respect to these forward-looking statements, management has
made assumptions regarding, among other things, development and deployment of new technologies;
operating costs; efficiencies and cost savings of multimode technologies; customer and network
usage; customer growth and retention; pricing; service, coverage and quality; environmental
sustainability; availability of devices; the timing of various events and the economic environment.
Sprint Nextel believes these forward-looking statements are reasonable; however, you should not
place undue reliance on forward-looking statements, which are based on current expectations and
speak only as of the date of this release. Sprint Nextel is not obligated to publicly release any
revisions to forward-looking statements to reflect events after the date of this release. Sprint
Nextel provides a detailed discussion of risk factors in periodic SEC filings, including its annual
report on Form 10-K for the year ended Dec. 31, 2010.
Sprint Contacts
Investor Relations
Yijing Brentano, 800-259-3755
investor.relations@sprint.com
Investor Relations
Yijing Brentano, 800-259-3755
investor.relations@sprint.com
Media Relations
Scott Sloat, 240-855-0164
Scott.sloat@sprint.com
Scott Sloat, 240-855-0164
Scott.sloat@sprint.com
Clearwire Contacts
Investor Relations:
Paul Blalock, 425-636-5828
paul.blalock@clearwire.com
Investor Relations:
Paul Blalock, 425-636-5828
paul.blalock@clearwire.com
Media Relations:
Susan Johnston, 425-216-7913
susan.johnston@clearwire.com
Susan Johnston, 425-216-7913
susan.johnston@clearwire.com
JLM Partners for Clearwire
Mike DiGioia or Jeremy Pemble, 206-381-3600
mike@jlmpartners.com or jeremy@jlmpartners.com
Mike DiGioia or Jeremy Pemble, 206-381-3600
mike@jlmpartners.com or jeremy@jlmpartners.com
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