Clearwire may skip paying its $237 million debt payment

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Clearwire may be in a heap of trouble. The wireless carrier is planning to strategically delay paying a $237 million debt payment that is due December 1st says a Wall Street Journal report. The payment would put a significant dent in the company’s cash reserves and hurt future expansion plans. The WiMAX company currently has about $698 million in cash and short-term investments that it needs to invest wisely if its 4G network is going to compete with Verizon and AT&T.

Clearwire has a 30-day grace period to make the payment which gives it some breathing room. Chief Executive Erik Prusch is reportedly going to use that time to secure more funding and sign new service deals. Delaying the payment is a last ditch effort to keep the company afloat and what happens in the next month may decide the company’s future..

To  make matters worse, Clearwire’s future with Sprint is uncertain. Sprint owns 54% of Clearwire and is using WiMAX as its 4G solution. Recently, Sprint said it was considering a switch to LTE, the major competitor to Clearwire’s WiMAX network. Sprint also agreed to carry the iPhone, a handset that is not and probably never will be compatible with WiMAX.

Though Clearwire did not mention it, the Wall Street Journal Report did bring up the “B” word – bankruptcy. If Clearwire fails to come up with this payment, the company may be forced to file for bankruptcy so it can restructure its debts. A person familiar with Sprint said the carrier would not buy out Clearwire just to keep it out of bankruptcy. Without the backing of Sprint, Clearwire’s future looks dim.

[Via The Wall Street Journal]

  • Anonymous

    That may well be the coolest thing yet dude. Wow.

  • Does not sound two good for Clearwire .

  • Mister2sc88

    For mobile hi speed internet clear is good.  My only complaint is the penatration issues with WiMax (inside of office buildings, apartments, etc) its not as fast as LTE or HSPA as of right now.  When it does work well it blazes!  At the beginning I had great expierence with it and as time has gone by I have been less satisfied. 

    Another point you need to remember is that clear is the only carrier to offer truely unlimited internet.

  • I’m glad they’re going out of business.  It’s exactly what they deserve.  Clear had been making a living by blatently lying to their customers about providing unthrottled internet speeds when they were clearly limiting download speeds.  Then they started throttling people’s internet speeds if they used it much.  I would watch two cartoons with my son (about 40 minutes total) and then they would throttle my internet to speeds between .5 – 1 meg.  Then when you called in about it, they would pretend like they had no idea what you were talking about.  After arguing with them for about an hour they’d eventually admit to throttling you, and then say there’s nothing they can do to undo it.  And that in order for the throttle to be removed you have to not use your internet.  NOW THAT IS STUPID!!!  If I use my internet THAT I PAY FOR I get throttled and when I do get throttled the only way to undo it is TO NOT USE THE INTERNET I PAY FOR?!  That is insanely stupid.  These types of business practices are what drove many customers like myself to leave them.  They deserve to go out of business, good riddance.

  • I have never had throttled speeds with Sprint 4G (Wimax). The issue is that because Clear is so crappy with rolling out their network, Sprint customers have to suffer also with limited areas of use. I just recently got 4G Wimax in my area and love it. But if I cross the street from my house, I loose 4G coverage, WTF! Also 4G Wimax in buildings, forget it. The signal will be full outside, but step inside and it drops to either one or zero bars. In my opinion Sprint was in to much of a hurry to have a different 4G network then others and now Sprint customers are suffering. The only saving grace is that Sprint finally decided to go to 4G LTE, which should have been done in the first place. Because of Sprint’s error, I have to hold on to my EVO 4G until they release a EVO 4G LTE based phone. Other than that, Sprint, I love you. Your package plans and unlimited voice, text and data are awesome. Just made a bad decision with using Wimax, which I am glad they are fixing.

    So Clearwire, you will not be missed if you go.

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