On the other hand, Clearwire
Clear skies for Clearwire
In March, LightSquared's problems prompted Leap Wireless
Earlier this year, Clearwire inked wireless wholesale deals with FreedomPop and Simplexity as well, both of which were former customers of LightSquared.
MetroPCS, a supporter of LightSquared, is also thinking of collaborating with Clearwire.
How does all this stack up for Clearwire?
- The company can now look forward to less competition and stands a better chance of acquiring many of LightSquared's potential customers.
- Clearwire should now be able to secure more funds for its cash-intensive operations. That should satisfy some of its hunger for cash.
- Shortage of adequate spectrum is a significant problem in the telecommunications industry, even for behemoths such as Verizon and AT&T. That's one of Clearwire's strong points since it has 2.5 gigahertz of spectrum under its belt. With Lightsquared's satellite spectrum rendered useless by the FCC, Clearwire's spectrum becomes even more valuable.
- The fresh inflow of customers should lessen Clearwire's dependence on Sprint for business.
LightSquared brandishes the lightsaber
As fellow Fool Anders Bylund has pointed out, LightSquared is not taking this setback lightly and is launching a legal battle against the FCC's crippling decision with its army of lawyers. But no matter what it does, Lightsquared is unlikely to make up for the damage to its client base. I wouldn't be too worried about Lightsquared's attempts to reverse the FCC's decision.
The Foolish bottom line
Thanks to the failed Sprint/LightSquared deal, Clearwire and its shareholders can breathe a sigh of relief. The company can now look forward to a brighter and faster future as it rolls out 5000 TD-LTE cell spots by June 2013. I would keep a close watch on Clearwire.
Sound interesting? Well then, don't forget to stay up to speed with the latest on Clearwire by adding it to your watchlist. It's free and lets you stay on top of the latest news and analysis for your favorite companies.
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Fool contributor Keki Fatakia does not hold shares in any of the companies mentioned in this article. 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.