U.S. cable company Time Warner (News - Alert) Cable recently announced plans to sell its 46.4 million shares in Clearwire Corporation, a venture created to build a high-speed wireless Internet network across the country.
According to a filing made by Time Warner last week, the cable provider has alerted other Clearwire investors – including such companies as Sprint (News - Alert) Nextel and Intel – of its intentions to sell its shares.
A major factor in Time Warner's decision to sell its Clearwire shares is the fact that the cable company, along with Comcast (News - Alert), agreed in December to market and sell Verizon Wireless service to customers. This deal allows the cable companies to combine wireless service with their current offerings: television, landline phone and broadband Internet.
“It seems like an opportune time to start to sell the shares in light of the company’s arrangements with Verizon (News - Alert) Wireless,” said Justin Venech, a Time Warner Cable spokesman.
Verizon's dealings with cable companies have drawn some controversy, as many feel the promotion of other company's services could stifle competition for both high-speed Internet and cable TV.
But when the FCC (News - Alert) approved the Verizon cable deal in August, it added conditions to the agreement, most notably that Verizon Wireless stores are not allowed to sell TV and broadband services from the participating cable companies.
Time Warner agreed back in 2008 to acquire a stake in Clearwire to help fund a WiMax network, offering 4G wireless access nationwide. The joint venture with Sprint, however, has struggled to gain subscribers since its launch, which actually prompted Time Warner and Comcast to begin dealing with Verizon Wireless instead, which is already operating a 4G network based on long-term evolution (LTE) technology.
Indeed, Clearwire hasn't been performing too strongly lately, ranked as having the lowest return on equity in the wireless telecommunications services industry by SmartTrend. The venture's shares have fallen 21 percent this year alone.
In 2008, Time Warner spent $550 million for its stake in Clearwire. Today, those shares are worth around $70 million.
Want to learn more about the latest in communications and technology? Then be sure to attend ITEXPO West 2012, taking place Oct. 2-5, in Austin, TX. Stay in touch with everything happening at ITEXPO. Follow us on Twitter.
Edited by Braden Becker