Track the companies that matter to you. It's FREE! Click one of these fan favorites to get started: Apple; Google; Ford.



Clearwire Joins Fight Against Goliaths

AT&T (NYSE: T  ) and Verizon (NYSE: VZ  ) may be the biggest mobile carriers in the U.S., but if they think their sheer size can dictate the rules of the wireless game in the States, they should take another peek behind them. That object looming larger in their rearview mirrors is the Rural Cellular Association, and it is determined to protect the interests of its 100-plus member carriers by mitigating the current mobile duopoly's outsize influence.

The RCA's latest roster addition is Clearwire (Nasdaq: CLWR  ) . It joins T-Mobile USA, which became a member in March, and Sprint (NYSE: S  ) , which came on board almost a year before that. Clearwire's addition is important because the RCA now has every significant wireless carrier in the U.S. -- less the two mobile giants themselves.

Until recently, the RCA bylaws limited its membership to those carriers with fewer than 10 million subscribers, but it realized it needed more clout than those smaller carriers could bring to protect its members' interests. So the organization reset the upper limit high enough to welcome companies like Sprint, with its 48 million subscribers, and T-Mobile USA, with its 33 million -- but not high enough to let in AT&T, at 104 million, nor Verizon, with its 93 million.

The importance of Clearwire's addition, though, isn't its size -- it only has 1.3 million retail subscribers to go along with its 9.7 million wholesale customers -- but rather the united front the RCA can now bring to bear in the inevitable fights over whatever spectrum frequencies the Federal Communications Commission will offer up in the future.

Right now, the RCA is at the forefront of the opposition to Verizon's recent large spectrum acquisitions. For $3.9 billion and some cross-marketing agreements, Verizon bought a large cache of wireless spectrum from several cable companies. The giant carrier has to show that this deal won't have an anticompetitive effect. If it can't, however, that spectrum will again be on the table for possible purchase by the RCA members.

Clearwire hopes to get a boost from joining the RCA, but the perpetually on-the-brink mobile broadband provider definitely got a shot in the arm late last week when investment company Crest Financial bought a 5.9% state in it. Crest cited in its filing that it thought Clearwire was presently undervalued. Clearwire is still majority-owned by Sprint.

Whoever comes out on top in the carrier battles, there will always be a need for mobile devices -- and the parts that make them work. The Motley Fool has released a free report called "The Next Trillion-Dollar Revolution." Don't miss out on this report. Get it today!

Fool contributor Dan Radovsky owns shares in AT&T. The Motley Fool has a disclosure policy.
We Fools may not all hold the same opinions, but we all believe that
considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.

Read/Post Comments (1) | Recommend This Article (3)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On June 05, 2012, at 5:18 PM, spokanimal wrote:

    Clearwire added yet another wholesale partner today as well.

    It seems that they are the "Switzerland" of wholesale wireless networks.

    It also looks like once they launch LTE-Advanced on 40 mhz channels, that they're going to be the top performing network as well.

Add your comment.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 1903692, ~/Articles/ArticleHandler.aspx, 10/23/2016 12:27:02 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated 1 day ago Sponsored by:
DOW 18,145.71 -16.64 -0.09%
S&P 500 2,141.16 -0.18 -0.01%
NASD 5,257.40 15.57 0.30%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

12/31/1969 7:00 PM
CLWR.DL $0.00 Down +0.00 +0.00%
Clearwire Corp CAPS Rating: **
S $6.55 Down -0.17 -2.53%
Sprint CAPS Rating: **
T $37.49 Down -1.16 -3.00%
AT and T CAPS Rating: ****
VZ $48.20 Down -0.94 -1.91%
Verizon Communicat… CAPS Rating: ****