Clearwire's (Nasdaq: CLWR) financial woes and corresponding construction slowdown have dramatically, some might say shockingly, impacted DragonWave's bottom line. The Canadian wireless technology supplier has predicted that revenues would slip to $15 million in the fourth quarter, completing a year-over-year slide of 75 percent.
DragonWave gets about 80 percent of its business from Clearwire which has slowed down construction as it seeks ways to find more revenue to keep the firm afloat. On a positive note among this dreariness, the 4G WiMAX service provider said that Ben Wolff, who replaced founder Craig McCaw on the company's board, is acting as a "strategic adviser," perhaps signaling that the company has new funding sources in sight. Clearwire, at least for now, appears to be the mobile wireless path for cable partners Comcast (Nasdaq: CMCSA), Time Warner Cable (NYSE: TWC-WI) and Bright House Networks and the 4G option for Sprint (NYSE: S), which is also loosely allied with the cable industry.
A more positive Clearwire financial picture can't happen too soon for DragonWave. The Canadian firm is looking for new business but "the visibility into these opportunities with both new and existing customers remains very limited at this time," CEO Peter Allen said.
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