McCaw Files for WiMax IPO

His Clearwire lost $140 million last year on sales of $8.5 million.
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Cellular pioneer Craig McCaw filed plans Thursday for a $400 million public offering of Clearwire shares.

The wireless broadband upstart, now based in Kirkland, Wash., has been a curiosity ever since McCaw bought the business in 2003. Back then it was based in Arlington, Texas. Using a not fully standardized technology known as Worldwide Interoperability of Microwave Access, or WiMax, Clearwire launched limited service in 2004.

Since then, the service has expanded to 27 markets, largely in the Northwest and Mid-Atlantic. Currently the company has 88,000 subscribers in the U.S. and 11,500 in Belgium and Ireland.

Not surprisingly, the company accumulated $174 million in losses as it built up operations, and carries $210 million in debt. Last year, Clearwire lost $140 million on $33.4 million in sales -- $8.5 million million in service revenue and $25 million in equipment sales.

Clearwire holds licensed radio spectrum in the 2.4 gigahertz to 2.6 gigahertz range and delivers fast mobile connections over a much broader territory than technologies like WiFi, with their hot-spot limitations.

While WiMax is a promising technology for the laptop users seeking fast connections on the road, the $50-a-month service competes directly with third-generation technology offered by wireless players like

Verizon Wireless




McCaw has been involved with the startup, financing or sale of a number of ventures, including McCaw Cellular, AT&T Wireless, Nextel Communications and Nextel Partners.

Though WiMax and wireless broadband in general is seen as a massive tech growth opportunity, some observers remain skeptical.

"It's not ready for prime time," said one hedge fund manager who has been following the progress of the company. The money manager also says the business model is "useless."

Clearwire is being underwritten by Merrill Lynch, Morgan Stanley, JPMorgan, Bear Stearns and Wachovia Capital Markets.

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