Should I look at Clearwire?

Clearwire made a big bang a few months ago, raising $1B in their IPO. The stock has been hovering around the offering price since then, but made a little jump today when they announced that they raised another $1B in debt. So, should you use Clearwire?

The commercials on Clearwire are extremely misleading. They talk as if the service is similar to a Verizon or Sprint aircard, but with the throughput of cable or DSL. The truth is that they have not yet had the FCC approve their laptop card, so in order to take the service anywhere the user must take their notebook-sized modem and it's power cord with them.

The network coverage is spotty (the Billions raised are going to building out towers just like any other cellular company has to do) and so it'll work ok in major metropolitan areas, but not everywhere and there will be dead spots. Also, the throughput maxes out at 1.5 mbps. Both DSL and cable operate at higher speeds (the slowest at 2-3 times faster). One of the biggest giveaways is that when you look at their website they always compare themselves to dial-up.

I don't think that the company stands a chance of going bankrupt any time soon, so you don't need to worry about that. If you've ever read "Into Thin Air" which is the story of the building of McCaw Cellular (which became AT&T Wirelss-then Cingular-then AT&T Wireless AGAIN) you'll realize that Craig McCaw is a master of taking a company that's held together by bandaids, making it look like Atlantis and selling it to a deep pocketed savior for billions. I'm not sure if I'd buy the stock right now due to the revenue vs. debt ratios and the cash flow numbers, but this company will be around for a while.

One thing I would NOT do is put your voice service on it. This is not just Clearwire, but any IP voice provider including cable. Maybe it's the survivalist in me, but in addition to IP voice quality not being up to my standards, the immunity of regular old telco voice service to power outages is a big plus for me.