Clearwire soars after govt blocks LightSquared

Reuters

Shares of wireless service provider Clearwire Corp rose 5% on Wednesday following a U.S. government decision to block start-up LightSquared from building a rival wireless network.

Late on Tuesday, regulators said there was no solution to interference problems the LightSquared (Reston, Va., USA) network would have caused with critical services that rely on the Global Positioning System (GPS), including aviation.

Clearwire (Kirkland, Wash., USA) shares rose 12 cents to $2.41 in morning trade on Nasdaq. Shares of Dish Network (Meridian, Colo., USA) rose 2.4% $29.04 as some investors bet that it too could benefit from LightSquared's woes.

LightSquared, backed by Philip Falcone's Harbinger Capital Partners, wanted to use satellite spectrum it bought to build a network to sell wholesale wireless services to compete with Clearwire, which has set itself up as a wholesale provider of wireless capacity.

At a time when all U.S. operators say they face a scarcity of wireless spectrum, the elimination of LightSquared spectrum for cellular services would help Clearwire, which has lots of wireless spectrum to spare, Evercore analyst Jonathan Schildkraut said.

"Any event which decreases the supply of available spectrum should be a positive for Clearwire, which remains one of the last holders of immediately deployable excess spectrum," he said. "As such, we would look for Clearwire to announce new wholesale agreement wins over the next several months."

Dish Network could benefit if it can get FCC approval to use spectrum it has bought for cellular services. Analysts have said the Dish spectrum may not have the same interference problems as the LightSquared spectrum.

(Reporting By Sinead Carew; editing by John Wallace)

ArticleTools

Featured Reports

Global Connected Consumer Devices: Key Trends, Opportunities and Market Forecasts 2015 - 2020

An evaluation of Connected Consumer Device ecosystems, market drivers, constraints, and opportunities for value chain constituents
Learn More

 

End-to-End M2M, Seventh Edition
This report includes forecast data for the period 2014 – 2019 with analysis of key drivers, success factors, and industry dynamics.
Learn More

 

The Future of Cloud WAN
The emergence of cloud computing has put new demands on the WAN. Not only do customers demand highly robust and secure WAN connections, but they must also deliver new levels of flexibility and manageability.
Learn More