Free Newsletter

NextWave warns of possible return to bankruptcy

Despite US spectrum shortage, it has failed to sell most of its huge base of licenses, which could come to market now


Published: 18 July, 2011

READ MORE: Spectrum | US | Nextwave Wireless

The rollercoaster history of NextWave Wireless may be coming to an end at last, with the firm saying that it has been unable to renegotiate the terms of its debt with lenders. That could force a filing for bankruptcy protection - and another interesting spectrum sale, hard on the heels of Dish Network's purchase of TerreStar's mobile satellite licenses, also from the bankruptcy process.

NextWave is remembered by many for buying $4.7bn worth of PCS licenses in 1996, failing to pay more than the $500m down payment, and haggling with the FCC for years, many of these from within Chapter XI bankruptcy protection. It emerged from that, sold most of its PCS assets to Verizon, but retained extensive holdings in 2.5GHz and 2.3GHz also acquired more in the AWS auctions. It then sought to build up a spectrum-to-equipment play in WiMAX with a series of acquisitions, including IPWireless and PacketVideo, but overstretched itself financially and sold off everything except most of the spectrum assets.

It has been trying to sell many of those but has had limited success, despite the much vaunted 'spectrum famine' in the US. Like Clearwire, which also cancelled plans to sell off some of its 2.5GHz licenses, NextWave may have come up against hostility to high frequency spectrum, which has challenges in terms of range and indoor penetration - though is often ideal for dense urban metrozones. In addition, the 2.3GHz band in the US is split in two, limiting capacity and raising interference issues.

Now its licenses could come up for sale at more attractive terms - according to a filing with the SEC on Monday, NextWave is considering bankruptcy. It wrote: "As previously disclosed, NextWave's cash reserves are not sufficient to meet these payment obligations." In the event of a default, "the holders of the secured notes could proceed against the assets pledged to collateralize these obligations, including all of NextWave's domestic wireless spectrum assets. These conditions raise substantial doubt about NextWave's ability to continue as a going concern. Inability to obtain a forbearance agreement, and ultimately a refinancing transaction or maturity extension, would significantly restrict the Company's ability to operate and could cause it to seek relief through a filing in the United States Bankruptcy Court."

Although operators may be unwilling to pay high prices for spectrum above 2GHz - which carriers higher roll-out costs for mobile broadband than the sub-1GHz bands everyone is chasing - this remains a strong base for a data network, as Clearwire shows. With mobile satellite bands currently perceived as high risk after the GPS interference issues that are dogging LightSquared, players who need more 4G capacity may look again at NextWave.

Related Stories


  • email story Email
  • print story Print
  • digit digit
  • facebook facebook
  • Twitter Twitter
  • Linked-in Linked-In
  • Comments (0)


Add Comment
No comments yet. Be the first to add a comment!

    BYOD: Market Analysis and Forecasts

    An in-depth insight into the rise of BYOD policies within the enterprise and analysis of the impact the trend will have on IT departments,...

    Voice Command, Control and Search on Mobile Phones: Market Analysis & Forecasts

    This report provides a comprehensive insight into the growing importance of voice command, control and search on handsets, analysing...

    Data Centre Network Equipment: Market Analysis and Forecasts

    This report provides a global assessment of the data centre network equipment market. Besides assessing the key market trends, sub-markets...

    HetNet Market Summary & Forecasts: Macro Cells, Small Cells & Wi-Fi Offload

    Carriers are struggling to cope with the explosion of data traffic on their networks, and the additional deployment of LTE and legacy...

    Over-the-Top Communications: Threats & Opportunities for Mobile Operators

    This report examines the implications of widespread adoption of mobile over-the-top IP communications for mobile operators, handset...

    Portable Gaming Consoles: Market Analysis and Forecasts

    This report provides a global assessment of the PGC market. In addition to assessing the key market drivers, market barriers, vendor...

    Satellite Phones: Will Dual Mode Help the Phoenix Rise from the Ashes?

    Satellite phones have followed an arduous path since their much-hyped launch more than a decade ago. The hype was followed by an e...

    Mobile Widget Platform Market Analysis: Understanding the Business Case and ROI

    This white paper presents an analysis of the mobile widget platform market, as well as metrics supporting a mobile carrier?s busin...


You must be a registered user to post a comment. or
Username *
Email *
Comment *