Sprint-Clearwire: Analysts React: Sorting Out The Winner And Losers

The market had trouble making up its mind on the proposed Clearwire-Sprint (NYSE: S) WiMax JV. After spiking at the open, both companies ended up down slightly on the day. Clearwire (NSDQ: CLWR) was up 9 percent at one point. Analysts seem mixed as well:

Rich Greenfield, Pali Research: Did the cable operators decide to fund this venture because it’s simply the lowest-cost wireless strategy available to them, or do they plan to place some wireless chips elsewhere as well? Greenfield notes obvious comparisons to the failed Sprint-cable Pivot JV, which was similar in scale, complexity and ambition: “We picture a joint-venture team meeting in an aircraft hanger with hundreds of people all trying to stress the needs of their business relative to the person(s) sitting next to them.” Also noteworthy is the absence of Cox, which has often gone in its own direction ahead of the curve.

Jeff Lindsay, Bernstein: Google (NSDQ: GOOG) is “wading, not jumping” into WiMax with this deal, and its $500 million investment is a one-time deal, with no obligation to provide further cash. Thus, for investors, it’s a safer route than some scenarios that might have played out had they bid to win for 700 MHz spectrum. So it’s good on the cost front, though it may not move the needle much on the revenue front: “This transaction gives us a clearer picture of how Google will be participating in this fast-growing market, but it does not increase our already healthy projections for Google’s mobile advertising revenue.”

Craig Moffett, Bernstein: “The big winner here would appear to be Sprint. The WSJ’s valuation of $12 billion (note: the deal size came to $14.5 billion) implies that Sprint and Clearwire will continue to own the bulk of the venture’s equity. This is a notable positive development for Sprint, which contributes only its spectrum and is absolved of the enormous investment burden associated with a solo Wi-Max build-out.” He added that DirecTV (NYSE: DTV) and DISH are the “odd men out”, having only limited, tenuous opportunities in broadband wireless.

Nadina Manjaro, ABI: (via IHT) This echoes the view that Sprint did well to limit its capex going forward: “The major issue for Sprint was the money… If Comcast (NSDQ: CMCSA), Google and Time Warner (NYSE: TWX) invest the money, you’ll definitely see it taking off.” (Well, eventually)

Tim Horan, Oppenheimer: (via AP) “If new Clearwire manages to avoid the massive channel conflicts it will have with its strategic partners and executes well