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Clearwire Loss Grows as Revenue Rises

Wireless broadband contender Clearwire LLC (Nasdaq: CLWR) posted an increased second-quarter loss today but said that revenues grew as it added new customers prior to the deployment of its first mobile WiMax network later this year.

The Kirkland, Wash.-based operator posted a second-quarter loss of $199.1 million, or $1.21 per share, compared with a loss of $118.1 million, or 72 cents per share, in the year-ago quarter. Revenue grew to $58.6 million from $35.5 million 12 months ago. (See Clearwire Reports Q2.)

The operator added 18,400 subscribers in the second quarter, a growth of 54 percent compared to the same quarter a year ago. Average revenue per user (ARPU) for the 2008 second quarter was $39.28, an increase over the $37.93 level from the 2007 quarter, and a sequential increase of $2.42.

The operator says its merger with Sprint Corp. (NYSE: S)’s WiMax assets is on track to be completed by the end of the year. By then, Clearwire hopes to launch its nationwide network, with the help of $3.2 billion from Google (Nasdaq: GOOG) and the cable companies.

The Sprint deal is still awaiting completion of the necessary regulatory approval and approval by Clearwire shareholders, CEO Ben Wolff noted on Clearwire's earnings call. Indeed, AT&T Inc. (NYSE: T) has been complaining to the Federal Communications Commission (FCC) recently about the spectrum involved in the merger. (See AT&T Looks to Block Sprint/Clearwire Merger.)

“Network deployment for our first four planned mobile WiMax networks is ramping well,” said Wolff on the call. “Our Portland [Ore.] market is now moving from network readiness testing to operational readiness testing.”

The Portland deployment is expected to be launched commercially in the fourth quarter. That network can potentially cover up to 1.2 million people, Wolff said.

Clearwire's networks in Atlanta, Las Vegas, and Grand Rapids, S.D., could also be launched by the end of the year, Wolff said on the call. This, however, is dependent on whether the Sprint deal closes on time and whether the company chooses to acquire "additional funding in the interim," he said. The company could also decide to take additional funding if it wants to accelerate WiMax deployments before the deal closes. (See Clearwire in Euro Partner Talks.)

The company plans to upgrade the bulk of its pre-WiMax markets to mobile WiMax by the end of 2009. As Unstrung has previously reported, Clearwire plans to use a WiMax overlay to deploy the new technology while keeping the older network running. (See Clearwire’s WiMax Overlay.) The company is still bullish about its claim to be the first to launch “4G” services before larger rivals AT&T Inc. (NYSE: T) and Verizon Wireless and with much more bandwidth in hand. "Our spectrum position will exceed the recommended ITU requirement for 4G,” Wolff said. “We will be uniquely positioned to deliver 4G services with over 100 MHz of spectrum available in most markets." (See Clearwire: We're Ready for Primetime.) — Dan Jones, Site Editor, Unstrung

lrmobile_kumaramitabh 12/5/2012 | 3:34:41 PM
re: Clearwire Loss Grows as Revenue Rises The starategy of Clearwire and the problems it is now facing in migrating to the standard Mobile WiMAX bring to the fore the typical problems the companies land in when they deploy non-standard Technologies. Ultimate, when it costs customers, the results are faced by the service provider as well.


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