The Inevitability of Clearwire

Published by: Boschulte Schnee Group LLC

Published: Jul. 8, 2009 - 50 Pages

Table of Contents

Clearwire- setting the record straight

Key conclusions: a) Huge opportunity b) Real risks far less than perceived risks

Market drivers: Broadband; Mobile Internet; Smartphone growth; Convergence

Clearwire’s opportunity - 4 key ingredients of success

Clarifying the supposed LTE vs. WiMAX “threat “

Why Verizon is in a Quandary about 4G

AT&T’s HSPA+ paradox

Necessity of an All-IP network

Advantages of the new Open Mobile business model

Spectrum - Clearwire holds a major advantage

Valuation of Clearwire spectrum holdings

Comparison with AT&T and Verizion spectrum assets

The New Clearwire;

a) $3.2B financing from Google, Comcast, Intel, others;

b) Mobile WiMAX rollout;

c) Marketing vision;

d) Legacy business

Projection of Clearwire growth to 2013

Valuation metrics and potential valuation of Clearwire

Why Competitive Dynamics suggest a major premium valuation for Clearwire

Clearwire’s alignment with IT/Internet growth forces

Tables and Figures

Figure 1. Broadband Wireless Subscriber Growth Forecasts - To 2012

Table 1. Nearer to Home - North America - Verizon Data Growth

Table 2. AT&T Wireless Data ARPU Growth

Table 3. LTE/WiMAX/CDMA Latest Update - 9-Factor Comparisons

Table 4. Business Model Elements - Closed vs. Open

Table 5. Open Carrier vs. Closed Carrier - Economics, By Category

Table 6. Spectrum Holdings Compared: AT&T, Verizon, Clearwire 2008 And Beyond

Figure 2. Distribution of Services Per Model Cell Site Of AT&T or VZ

Table 7. Spectrum Assets And Use - Major U.S. Carriers

Table 8. Throughput Comparison, By Technology For Model Site

Table 9. Expected mb Load For Expected QoS And Traffic Breakdown Per Model Site

Table 10. Clearwire - Status and Plans: Coverage, Devices, Network Build

Table 11. Clearwire Portland WiMAX Services: Mobile and Home

Table 12. Clearwire Investors, Directors, Officers Stock Ownership

Table 13. Clearwire Governance - Supra-Majority Vote Requirements

Table 14. Clearwire Board Structure

Table 15. Potential Value of Clearwire Spectrum

Table 16. National Spectrum Availability, Primary Bands

Table 17. VZ and T Spectrum Holdings, By Band

Table 18. VZ and T Spectrum - POPs, MHz, MHzPOPs, By Band

Table 19. Clearwire Pro Forma Results 2008 vs. 2007

Table 20. Clearwire Pro Forma Results 2008 vs. 2007 1st 25 Markets

Table 21. Description of BSG WiMAX Model Spreadsheet Items (over 400 items)

Table 22. Clearwire - 5-Year Projection

Table 23. Valuation Comparison - Clearwire and Alltel Buyout

Table A-1. Magnet Services and Add-Ons: Cable, Wireless, Telco

Figure A-1. Clearwire Marketing Strategy Vision

Abstract

• LTE Myths and Reality. Presents a new, incisive analysis of the supposed “LTE vs. WiMAX” controversy
• AT&T/Verizon Issues With 4G. Provides a cogent assessment of the serious problems confronting the entrenched wireless giants, AT&T and Verizon, as they attempt to deal with the new realities of 4G wireless and the tidal wave of the Mobile Internet
• Clearwire’s Market Opportunity. Explains the disruptive factors of change that open the way for Clearwire to address a mammoth market opportunity
• Clearwire’s Critical Positioning. Assesses the four critical ingredients for success in a 4G/converged telecom world and how Clearwire is in position to capitalize on these requirements
• Clearwire’s Valuation Potential. Projects the five-year growth potential of Clearwire and potential returns; provides valuation metrics and analyzes in detail why Competitive Dynamics indicate that Clearwire can achieve a significant Valuation Premium
• AT&T/Verizon “Stress Test”. Provides a “stress test” that exposes the severe limitations on AT&T and Verizon as their cellsites are called on to handle escalating 4G/Mobile Internet traffic
• Spectrum - A Key Factor. Explains why spectrum assets are of such vital importance in a 4G/Mobile Internet world; analyzes the relative spectrum positions of the major U.S. carriers and isolates the major difficulties confronting AT&T and Verizon on the spectrum front

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