Clearwire LLC (Nasdaq: CLWR) is adding a steady stream of customers, even in markets where it is yet to have service. And to continue this trend, the WiMax operator will introduce its first two WiMax smartphones before the end of the year.
The phones include an Android-based
Samsung Corp. phone optimized for video and a dualmode High Tech Computer Corp. (HTC) (Taiwan: 2498) handset, says Clearwire CEO Bill Morrow. Sprint has also announced plans for its first 4G smartphone, the HTC EVO 4G, but Morrow didn’t confirm if it’s the same device. (See Sprint Pins Hopes on WiMax Phone.) He says both of Clearwire’s smartphones will carry the Clear name. They are likely to work on both networks.
Overall, Clearwire ended Q1 with 971,000 subscribers, up a full 94 percent from the previous year. It added 283,000 new subs in the quarter, more than it added in the full calendar year of 2009. 111,000 of those customers were wholesale users who signed up through one of Clearwire’s partners, including Sprint Corp. (NYSE: S), Comcast Corp. (Nasdaq: CMCSA, CMCSK), and Time Warner Inc. (NYSE: TWX).
Notably, one third of those wholesale customers weren’t even in a Clearwire market. They were using dualmode devices that switch between Sprint’s 3G network and Clearwire’s 4G network. Morrow reiterated that Clearwire is already getting recurring revenue from these out-of-network, wholesale customers and expects them to migrate to 4G when it’s launched in their markets.
In total for the first quarter, Clearwire’s revenues were $106.7 million, a 72 percent increase from the previous year’s first quarter, but it also posted a loss of $94.1 million compared to a year-earlier loss of $71.1 million. Chief financial officer Eric Prusch expects the losses to continue throughout 2010 as it continues its rapid expansion. (See Clearwire Reports Q1.)
Separately, Clearwire announced today that it will launch its mobile WiMax services in 20 new cities this summer. WiMax will go live in Daytona, Orlando, Jacksonville, and Tampa, Fla.; Kansas City, Kan.; Nashville, Tenn.; St. Louis; Salt Lake City; Merced, Modesto, Stockton, and Visalia, Calif.; Wilmington, Del.; Grand Rapids, Mich.; Eugene, Ore.; and Yakima and the Tri-Cities area -- Kennewick, Pasco, and Richland (duh!) -- in Washington. (See Clearwire Expands Summer WiMax Rollout.)
Clearwire is already planning major launches in big cities like New York and San Francisco this year. The operator is active in 32 cities at present and hopes to cover 120 million potential customers by the end of 2010.
The company is, however, facing a much bigger rival’s entrance into the mobile broadband arena. Verizon Wireless is intending to go commercial with Long Term Evolution (LTE) technology in 25 to 30 major cities in the US by the end of 2010, covering 100 million people. Morrow says he’s still open to the idea of merging with LTE in the future and is exploring what’s possible today. Clearwire's new agreement with Intel Corp. (Nasdaq: INTC) lets it back out of WiMax with just 30 days notice.
“It’s all about flexibility and focusing on what it is here today, which, when you look at the ecosystem and delivery, we’re cruising down a good path now and won’t lose the advantage we have going forward,” Morrow asserts.
— Sarah Reedy, Senior Reporter, and Dan Jones, Site Editor, Light Reading Mobile