Deal with satellite-TV giants signals more Clearwire growth
Clearwire has signed an agreement with two nationwide satellite-TV services that may raise the Kirkland company's profile and add customers...
Seattle Times technology reporter
Clearwire has signed an agreement with two nationwide satellite-TV services that may raise the Kirkland company's profile and add customers to its cutting-edge wireless broadband Internet service.
Both DirecTV and EchoStar Communications will be able to offer Clearwire's Internet and Internet telephone services to their customers. In return, Clearwire can offer TV services from one or both companies to its subscribers.
With the partnerships, the three companies will be able to bundle TV, Internet access and voice services.
The bundling, called a "triple play," has become a common offering among telecommunications and cable companies. By signing up for more than one service, the customer often gets a discount.
Announcement of the deal sent Clearwire stock rocketing $4.63, or 23.3 percent, to $24.50.
"We are always looking at new ways of getting product out and distributing it, and this helps solve how DirecTV and EchoStar would go about adding a high-speed Internet service to their offering," said Ben Wolff, Clearwire's chief executive. "We figured out a good way to work together."
Clearwire offers a form of an emerging technology called WiMax to about 260,000 subscribers worldwide. In the U.S., it operates in about 35 markets, including Seattle.
Clearwire's partnerships with DirecTV and EchoStar (which operates the Dish Network) is expected to be completed later this year after the companies get their computer systems in line to make it possible to deliver one bill to the customer.
Daryl Schoolar, a senior analyst with the In-Stat research firm, said Clearwire will benefit from the additional marketing opportunities.
He said DirecTV and Echostar, which respectively have 16 million and 13.4 million subscribers, will be able to compete with cable operators and telecom operators that offer the triple play.
"We continue to see trends with bundling," he said.
The arrangement is not exclusive, and DirecTV said the distribution agreement did not include an investment in Clearwire.
DirecTV, owned by Rupert Murdoch's News Corp., said more than a year ago it was willing to dedicate up to $1 billion for an investment in wireless broadband.
The company was rumored to be looking into a number of technologies, with Clearwire near the top of the list.
Wolff declined to comment Thursday on whether an investment could still be in the works. A DirecTV spokesman said the company is "always evaluating and considering options" related to broadband.
Wolff also declined to comment on rumors Clearwire could be forming a partnership or alliance with Sprint Nextel, which also is committed to rolling out a nationwide WiMax network.
Speculation that something could be under way sprouted from a Bear Stearns investor conference in New York, where Sprint Nextel Chief Executive Gary Forsee spoke Monday.
Forsee said that by late this year, he expects to have three WiMax markets up and running — in Chicago, Seattle and Baltimore.
But in answering a question about financing the costly rollout, Forsee said he saw three options: investments from WiMax equipment vendors, sale of network capacity to other companies for resale, or a new joint venture or tracking stock for Sprint's WiMax operation that would trade separately.
If the WiMax unit does well, a tracking stock would increase in value, even if the company as a whole performs poorly.
Tricia Duryee: 206-464-3283 or email@example.com