Is Clearwire Going to Survive?
Recent news from Clearwire is not promising! New CFO is leaving the company after 10 months, Scott Richardson (Chief Strategy Officer) is going to leave as well. If you look at Clearwire cash flow, they have burned $2 billion last year to expand their network. With $0.5 billion operational cost, one billion dollar in cash and virtually no meaningful revenue (just $80 millions) the million dollar question is; should they go ahead as planned expand the network and burn the cash in six months, or halt the deployment and stick to their cash to survive another two years?
As a “green field” operator, the huge amount of cash burn in initial phase is inevitable. As number shows, you can not grow organically as an operator and go head to head with tier-one operators. On the other hand, although you think one billion cash is available; in wireless operators world it is peanut! It can not cover the cost of a limited rollout, leave alone other expenses including marketing. Cash starvation is going to damage all business models need huge amount of CapEx, including launching a “green field” wireless operators.