Clearwire: 'Google Believes in Us'
All of Clearwire's standing investors except Google put up fresh funds for the latest round of cash. (See Clearwire's $1.5B Top-Up Confirmed .)
Clearwire CEO Bill Morrow was asked directly about Google's absence from the round during his company's third-quarter earnings call late Tuesday afternoon.
"Google believes in us," Morrow told his audience. "They are supporting us from a product management and strategic point of view."
He noted that Google's initial $500 million investment in the company in May 2008 still constitutes a large investment in the company. (See Sprint, Clearwire Create $14.5B WiMax Giant.)
Clearwire's new CFO, Erik Prusch, said the company had $2 billion in cash and cash equivalents on hand at the end of the third quarter. The company is going to the public bond markets with a high-yield offering seeking to raise a further $1.45 billion. This will pay off its existing credit facility and improve its debt structure, giving the company access to a further $240 million for network deployment.
This will help the company keep pace with its WiMax deployment plans. "We will cover over 30 million people by the end of the year," said Morrow. "We feel satisified we can get to that 120 million target [by the end of 2010]."
Clearwire added 44,000 net new subscribers in the third quarter. The company now has 173,000 customers in total signed up to its Clear WiMax service.
"Expectations for Q4 are to generate about as many subscriber acquisitions as the last three quarters combined," Morrow added.
Third-quarter revenues rose 13 percent to $68.8 million from $60.8 million in the previous year.
The operator company reported a net loss of $82.43 million, or $0.43 per share, compared with a loss of $72.71 million, or $0.45 per share, a year earlier.
The loss was attributed to increased costs linked to higher subscriber additions and greater marketing expenses in the 13 Clear WiMax markets.
— Dan Jones, Site Editor, Unstrung