Clearwire Corp. (CLWR-NASDAQ) has done perhaps one of the best things it could have done: it partnered with both Echostar (DISH-NASDAQ) and DirecTV (DTV-NYSE).
The agreement enables both satellite companies to offer Clearwire’s high-speed Internet service to their customers and Clearwire in turn will also be able to offer the video services of one or both satellite companies to its customers. This is expected to enable each of the three companies to offer high-speed Internet, video and voice in all current and future Clearwire markets. DIRECTV and EchoStar will have access to Clearwire’s wireless high-speed network, and will be able to market a bundle that includes Clearwire’s high-speed Internet services to their residential customers. DIRECTV and EchoStar will also have the ability to sell Clearwire’s branded services on a stand-alone basis.
Since satellite providers have an issue on the whole ‘high-speed web and telecom,’ this could be a great rounding out of the offerings outside of agreements they have with other telecom players. DirecTV claims more than 16 million subscribers and EchoStar claims more than 13.4 million subscribers. Even a 1% joint-venture sharing from each satellite provider would seem to be a significant add-on for Clearwire. The only question remaining on this is "Why didn’t I think of that?".
Clearwire shares are now up more than 6% at $21.00 pre-market on about 30,000 shares. The range the shares have seen since the IPO is $15.81 to $27.95.
Jon C. Ogg
June 14, 2007
Jon Ogg can be reached at [email protected]; he does not own securities in the companies he covers.
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