Clearwire’s Q2 all about anticipating merger
Clearwire reported that its second-quarter service revenue was up 65 percent, to $58.6 million, with growth driven primarily by a larger subscriber base. The company’s net loss was $199.1 million, compared with a net loss of $118.1 million for the like period in 2007.
The company had 461,000 subscribers at the end of the second quarter of 2008, up from 299,000 at the end of the second quarter of 2007. Clearwire tallied only 18,400 net adds in the second quarter.
\Modest subscriber growth was actually in the plans. Clearwire has been focused less on subscriber growth than on steadily improving margins (up on an EBITDA basis, but down on a net basis).
In anticipation of upgrading its networks to mobile WiMAX next year, Clearwire has also been stepping down its marketing, as well as scaling back its capital expenditures.
The company said it also benefited from increased customer adoption of its VoIP services, as well as from the migration of subscribers from introductory rates to full rates.
CEO Benjamin G. Wolff said: “At the end of last year, we stated that in 2008 we would focus more on driving profitability and less on top-line growth. In the second quarter, we delivered on that commitment, with the strong lift in Market EBITDA margin coupled with moderate subscriber additions being direct results of those efforts.”
Wolff also said: “Based on the strong performance of the beta trial of mobile WiMAX technology in our first WiMAX market located in Portland, Oregon, we are now focusing on accelerating the upgrade of our existing U.S. markets to mobile WiMAX technology."
Wolff said the company anticipates closing its acquisition by Sprint Nextel, a deal financed by Comcast, Time Warner Cable, Bright House Networks, Google and Intel, among others.
“The infusion of $3.2 billion in capital from our strategic investor group upon completion of the transaction will fuel our nationwide mobile WiMAX network deployment, which we believe will fundamentally transform the wireless communications landscape and the way all of us use the Internet,” Wolff said.
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