On December 31, Clearwire announced the immediate resignation of chairman Craig McCaw. No explanation was given and McCaw nominated Ben Wolff to replace him. Clearwire provides high speed internet service, specifically WiMAX 4G service, and has Sprint-Nextel as a 54% majority stakeholder. The company is due for major financial reorganization at the beginning of 2011.
Sprint-Nextel is still a major provider in the Charlotte area. The largest bank in the nation (and a top ten bank globally), Bank of America, is headquartered in Charlotte. The area also plays host to seven other Fortune 500 headquarters and one of the largest public hospital systems in the country. As a first-phase city in Sprint’s WiMAX 4G roll-out and home to several large Nextel push-to-talk customers, Charlotte has a keen interest in rumblings at Sprint and Clearwire.
One of the biggest issues between the partners is a dispute over how much money Sprint owes Clearwire for the rental of Clearwire’s high speed wireless networking service Sprint resells to its cellular customers. Another point of contention is Clearwire’s desire to sell services directly to the retail public, putting it in competition with Sprint. Should January 2nd pass without Sprint agreeing to infuse Clearwire with some $760M in cash through a debt purchase, Clearwire’s financial struggles will continue, possibly leading to a rocky end for the company. Sprint must make a decision that could lead to total ownership (which Sprint has stated it has no interest in) or the possible loss of WiMAX services.
Sprint’s biggest competitor in the area is Verizon Wireless, and its financially sound partner, Vodaphone. The first quarter of 2011 will be rough for Sprint and Clearwire, but the ramifications of any decisions won’t ripple through Charlotte until later in the year.
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