Clearwire Subs Slip in WiMax Wait

Operator posts a subscriber increase of just 8,000 as it throttles back on fixed wireless to wait for mobile WiMax

Dan Jones, Mobile Editor

November 10, 2008

2 Min Read
Clearwire Subs Slip in WiMax Wait

Clearwire LLC (Nasdaq: CLWR) added just 8,000 subscribers in the third quarter, the company reported today, as it drew back on marketing and buildouts in preparation for mobile WiMax opportunities. (See Clearwire Reports Q3.)

The figure represents quite a slowdown, as the company added 49,000 subscribers in the same quarter a year ago and 18,400 in the second quarter. (See Clearwire Loss Grows as Revenue Rises .) Clearwire has a total of 469,000 subscribers.

The Kirkland, Wash.-based operator is running a "pre-WiMax" fixed wireless network using NextNet technology to offer an over-the-air alternative to DSL. The company has previously said that it would be pulling back on customer acquisition efforts for fixed technology in order to focus on coming mobile WiMax launches, which are expected to come after the closure of its deal with Sprint Corp. (NYSE: S) at the end of the year. (See CTIA: Clearwire Talks Android & More and Clearwire: We're Still on Track.)

Clearwire intends to launch in Portland, Ore., in the first quarter of 2009. The company has also said it will launch in Atlanta, Grand Rapids, and Las Vegas next year, while recent job ads suggest that Los Angeles could also be a possibility. (See Clearwire: We're Ready for Primetime and Clearwire's LA Story.)

All of this hinges on the closure of the Sprint deal and its associated $3.2 billion funding from Google (Nasdaq: GOOG), Intel Corp. (Nasdaq: INTC), and others. (See Clearwire's Closing Approaches and Sprint, Clearwire Create $14.5B WiMax Giant.) The potential creation of the "new" Clearwire by the end of the year was given a boost last week as the Federal Communications Commission (FCC) approved the spectrum asset merger between Clearwire and Sprint. (See FCC Approves Sprint-Clearwire Deal.) "We were very gratified when last week the FCC announced unanimous approval of our pending transaction to combine Clearwire with Sprint's WiMAX business," Clearwire CEO Ben Wolff said of the approval. "We continue to make progress toward closing the transaction before the end of the year."

The next big date for Clearwire is the shareholder approval vote expected on Nov. 20. For the time being, however, the company is mostly looking at incremental gains and losses as it waits for WiMax.

Alongside the subscriber numbers, Clearwire reported a net loss of $166.6 million for the third quarter ended Sept. 30, 2008 compared to a loss of $328.6 million for the same period in 2007. Total revenue was up 47 percent from the previous year, at $60.8 million.

A bright spot for the operator was average revenue per user (ARPU) of $40.43, an increase of $3.02 above the $37.41 level from the year-ago quarter. The company says this was mostly due to its VOIP services.

— Dan Jones, Site Editor, Unstrung

About the Author(s)

Dan Jones

Mobile Editor

Dan is to hats what Will.I.Am is to ridiculous eyewear. Fedora, trilby, tam-o-shanter -- all have graced the Jones pate during his career as the go-to purveyor of mobile essentials.

But hey, Dan is so much more than 4G maps and state-of-the-art headgear. Before joining the Light Reading team in 2002 he was an award-winning cult hit on Broadway (with four 'Toni' awards, two 'Emma' gongs and a 'Brian' to his name) with his one-man show, "Dan Sings the Show Tunes."

His perfectly crafted blogs, falling under the "Jonestown" banner, have been compared to the works of Chekhov. But only by Dan.

He lives in Brooklyn with cats.

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