Clearwire 2010 Annual Report Download - page 30

If we are unable to execute our business strategy, either as a result of the risks identified in this section or for
any other reason, our business, prospects, financial condition and results of operations will be materially and
adversely affected.
If our business fails to perform as we expect or if we elect to pursue new or alternative business plans
and strategies, we may require substantial additional capital, which may not be available on acceptable
terms or at all.
As of December 31, 2010, we had available cash and short-term investments of approximately $1.74 billion.
We do not expect our operations to generate positive cash flow in 2011, but our current business plan involves taking
actions that we believe will cause our business to generate positive cash flows in the next few years, without the need
for additional capital. These actions involve continuing to grow our wholesale subscriber base, increasing our
operating efficiencies, and continuing cost reduction initiatives. However, the amount of capital that we will require
to implement our current business plan depends on a number of factors, many of which are difficult to predict and
outside of our control. In preparing our plans, we made certain assumptions, which may prove to be inaccurate, as to
the future performance of our business. These assumptions include, among other things, a favorable resolution of
the current wholesale pricing disputes with Sprint, continued increases in sales of our services by Sprint and our
other wholesale partners, our ability to cause the services we offer over our 4G mobile broadband network to remain
competitive with service offerings from our competitors, and our ability to reduce our operating expenses and
capital expenditures. If any of the assumptions underlying our plans prove to be incorrect and, as a result, our
business fails to perform as we expect, we may require substantial additional capital in the near and long-term.
Further, we plan to seek to raise additional capital to continue the expansion of our business and the
development of our 4G mobile broadband network. Additionally, we could use the additional capital raised to cover
any cash needs that may arise if the assumptions underlying our current plans prove to be inaccurate. Additional
capital could also be utilized to, among other things, expand the markets in which we deploy our 4G mobile
broadband network, augment our network coverage in markets we have already launched, and/or introduce new
products and services. We also may elect to deploy alternative technologies to mobile WiMAX, such as LTE, on our
network either together with, or in place of, mobile WiMAX if we determine it is necessary to cause the 4G mobile
broadband services we offer to remain competitive or to expand the number and types of devices that may be used to
access our services. Additionally, we regularly evaluate our plans, and we may elect to pursue new or alternative
strategies which we believe would be beneficial to our business. Such changes to our plans could also significantly
increase our capital requirements in the near and/or long term.
The amount and timing of obtaining additional capital is difficult to estimate at this time. A special committee
of our board of directors has been formed to explore available sources of additional capital and to pursue other
strategic alternatives for our business. Sources of additional capital could include issuing additional equity
securities in public or private offerings or seeking additional debt financing. Any additional debt financing would
increase our future financial commitments, while any additional equity financing would be dilutive to our
stockholders or our interest in Clearwire Communications. We may also decide to sell additional equity or debt
securities issued by us or our domestic or international subsidiaries, which may dilute our ownership interest in, or
reduce or eliminate our income, if any, from those entities. We may also elect to sell certain assets, including excess
spectrum, which we believe are not essential to our business, to raise additional capital. We previously initiated a
process to seek bids for the potential sale of certain excess spectrum; however, we are still in the process of
evaluating bids that we received, and there can be no assurances that such a sale will occur.
We expect the future revenues generated from our wholesale partner agreements to become an
increasingly larger percentage of our overall revenues, and if we do not receive the amount of revenues
we expect from those agreements it could materially and adversely affect our business prospects, results
of operations and financial condition, and/or require us to revise our current business plans.
Under our current business plans, the success of our business will rely to a greater extent on the growth of our
wholesale subscriber base and wholesale revenues. This element of our current business strategy is subject to a number
of risks and uncertainties. Under our 4G wholesale agreements, which we refer to as the 4G MVNO Agreements,
Sprint and the other Initial Wholesale Partners have the right to resell services over our network to their subscribers,
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