Clearwire Still Looks to Sprint for Funding
Clearwire's cash flow will allow it to continue operations up to that point, CFO Hope Cochran said on Wednesday's third quarter earnings call. Beyond that, she said the company could look to Sprint, strategic investors, new partners, vendor financing or "debt and equity funding."
It was clear on the call that the operator still considers Sprint a primary funding avenue. "We have had numerous discussions with Sprint, but there remains a gap," said CEO Erik Prusch, claiming that the two have made "solid progress" during the last few weeks.
Prusch pointed to the memo of understanding about LTE between the two as evidence of that progress. He said the agreement will help solidify hand-off arrangements, chipsets and site selection for the new technology. (See Sprint & Clearwire Bury LTE Hatchet.)
He added that Clearwire is looking for an extension of its wholesale agreement and a new commercial deal on LTE with Sprint. (See Clearwire & Sprint to Extend Wholesale Deal?)
Sprint is clearly the main beneficiary of Clearwire's wholesale agreement right now, even as it plots its own LTE network and prepares to stop selling WiMax devices by the end of 2012. Even with the iPhone now on Sprint's network, Prusch said he is comfortable that Clearwire will still see growth on Sprint's network in the next quarter. (See Sprint to Launch LTE by Mid-2012.)
Clearwire added 1.89 million net new subscribers, 35,000 retail users and 1.86 million new wholesale subscribers in the quarter. Officials said Clearwire's wholesale subscribers consist primarily of Sprint dual-mode smartphone customers.
Clearwire now expects to exceed its previous forecast of 10 million subscribers by the end of this calendar year, with a continued boost from its wholesale business. The company also expects to spend $300 million in 2011 on capex, $100 million less than previously expected.
In its third quarter, Clearwire shrank its net loss to $84.8 million, or 54 cents per share, on revenue of $332.2 million, compared with a loss of $139.4 million, $0.58 per share, on revenue of $142.2 million a year before. Excluding unusual items, Clearwire's loss was $0.34 per share compared with expectations of $0.40 from analysts surveyed by Thomson Reuters .
— Dan Jones, Site Editor, Light Reading Mobile