Clearwire Preps $1.5B Deployment in '09

As expected, Clearwire LLC (Nasdaq: CLWR) focused on its planned WiMax expansion plans this year and into 2010 as it announced a $118 million loss on its fourth-quarter earnings call this afternoon. (See Clearwire: Tight Tier 1 Focus .)

The $0.28 per share loss compares with a loss of $108.3 million in the same quarter in 2008. Service revenues grew to $59.7 million, compared with revenues of $45.4 million for the same period the year before.

Despite many questions in the media recently about the firm's ability to meet its deployment goals, Clearwire CEO Ben Wolff and crew sounded a confident note on the firm's conference call. "Our expansion plans are in full swing," Wolff said.

He reiterated the prediction that the firm's network will cover a potential 120 million customers by the end of 2010. This goal will encompass building out metropolitan markets that cover 75 million people by the end of 2009 and a further 45 million city dwellers by the end of 2010. (See Analyst: Clearwire Will Launch Nine in '09.)

But later in the call, new CFO David Sach did add: "We will base our buildout plans on the capital available to us."

The company had $3.1 billion available for expansion at the end of 2008. The company is expecting to spend between $1.5 billion and $1.9 billion on network buildout in 2009.

CFO Sach says that company has "sufficient capital" for network buildout into 2011.

As Unstrung has previously reported, this rollout will initially mean a concerted deployment in select Tier 1 markets this year and the next. "This summer we'll be expanding to Las Vegas and Atlanta," says Wolff. Further new markets to be added in 2009 include Chicago, Philadelphia, and Dallas/Ft. Worth. (See Clearwire Cloudy on Chicago.) Further activity in 2009 will include converting major Clearwire fixed wireless markets in Seattle, Honolulu, and Charlotte to mobile WiMax. The firm is also expecting to relaunch the Xohm brand in Baltimore with "better coverage" in 2009.

New York, Boston, Washington, Houston, and the San Francisco Bay Area lead the list of planned launches in 2010.

"Expanding our mobile WiMax markets across the top 100 markets will not happen overnight," notes Wolff, he says that the company will be able to offer customers roaming on the Sprint Corp. (NYSE: S) 3G network in the meantime. "We are currently testing dualmode 3G/4G products and expect to launch... this summer."

The company claims that it has seen good takeup on its lone live "Clear" WiMax market in Portland, Ore. "The rapid takeup in Portland has been more than double that of any of Clearwire's other 47 markets," says Wolff.

— Dan Jones, Site Editor, Unstrung

mobileinsider 12/5/2012 | 4:10:05 PM
re: Clearwire Preps $1.5B Deployment in '09 "Clearwire brought in about US$20.5 million in revenue and lost $118 million, or $0.28 per share" .... which means that another $1.5B will be spent to secure another 1M subs over the next two years while burning millions of more cash every quarter. When are investors going to start asking serious questions about the business plan?

Clearwire has spectrum which is a valuable asset to some operators. VZ, T-Mobile and AT&T will need more spectrum by 2011 in time for LTE build-outs.

I question any serious intent to spend any Capex whatsoever...It's a bluff which is why they are slow-rolling build outs.

mobileinsider 12/5/2012 | 4:10:02 PM
re: Clearwire Preps $1.5B Deployment in '09 Tera: I agree, more than $1.5B is needed for nationwide coverage ($5B is more like it). But, today we enjoy nationwide and global coverage with HSDPA/HSPA so where's the incentive to sign up for Clearwire? Investors - wake up. More on my thoughts at: http://svmobileinsider.blogspo...

t_newt 12/5/2012 | 4:10:02 PM
re: Clearwire Preps $1.5B Deployment in '09 "$1.5B will be spent to secure another 1M subs over the next two years while burning millions of more cash every quarter. When are investors going to start asking serious questions about the business plan?"

Clearly they are going to have to spend a lot of money building out their network before they can expect to start making money. I assume that's the business plan and that investors know this. Especially in today's economic environment, there will always be investors who don't have the stamina for this type of business and start second guessing the original goals.
Sign In