Clearwire looks past Q4 loss; announces rollout sked

Fri, 03/06/2009 - 7:35am
Brian Santo

Clearwire shrugged off a fourth-quarter loss, focusing instead on its ambitious plan to roll out WiMAX services in enough major markets by the end of next year to have covered up to 120 million potential customers. The company announced its next set of markets, and several new products aimed at increasing the utility of WiMAX connectivity.

Clearwire already was in 47 markets with pre-WiMAX service. In January, after the close of its fiscal 2008, Clearwire turned on its Clear WiMAX service in Portland, Ore., (story here) as its first commercial market (Baltimore was a trial market in 2008 – story here). Through the rest of 2009, Clearwire intends to make Clear available in Atlanta, Las Vegas, Chicago, Charlotte, N.C., Dallas/Ft. Worth, Honolulu, Philadelphia, Seattle and possibly others.

Scheduled for Clear rollouts in 2010 are New York, Boston, Washington, D.C., Houston and the San Francisco Bay Area.

At the same time, Clearwire said it will be bringing out a dual-mode 3G/4G modem, which could be an important addition.

In January, the company said its research showed that most potential subscribers will rarely, if ever, travel out of their home service area. Still, people do travel out of their service areas, and they want connectivity. With a dual-mode 3G/4G phone, Clear subscribers can gain national Internet access through Clearwire parent Sprint’s 3G Mobile Data Network.

The modem will be sold by Clear and Sprint and will automatically switch between WiMAX service and Sprint’s 3G network.

The company said it also plans to introduce later this month what it’s calling a “personal hotspot.” This would be a Clear accessory, which, when paired with the Clear 4G service, will open the Clear 4G network to hundreds of Wi-Fi-enabled products.

Meanwhile, Clearwire noted, Acer, Asus, Dell, Fujitsu, Lenovo, Panasonic, Samsung and Toshiba are delivering Centrino-2 processor-powered notebooks with the integrated Intel WiMAX / Wi-Fi chipset. Having WiMAX-enabled computers is expected to provide an enormous boost to WiMAX connectivity, just as having Wi-Fi built into PCs helped popularize that wireless technology.

Clearwire expects there to be nearly 100 mobile WiMAX devices – such as laptops, netbooks, handhelds, USBs and modems – available to customers by the end of the year.

News of rollouts and product introductions are not typical features of financial earnings statements, but Clearwire is in an uncommon position. The issue for Clearwire has less to do with financial performance (in the short term, anyway) than with making its service available and attractive to consumers.

In other words, Clearwire will continue to build infrastructure, turn on services and offer new products, so more losses are coming. The key, the company explained, is careful management of its cash, a task it acknowledges will be made harder by the recession.

Benjamin G. Wolff, chief executive officer of Clearwire, also deflected questions about Clearwire’s cash position, given that parent Sprint is so notably cash-strapped.

“In this difficult economic climate, our objective is to continue to balance the prudent use of our significant financial resources with our desire to take full advantage of the market opportunity that is in front of us, and we intend to do just that,” Wolff said. “This means retaining the flexibility to accelerate or decelerate our expansion based on our own successes and the macro-economic environment.”

Clearwire said it is targeting a total net cash spend in the range of $1.5 billion to $1.9 billion for 2009. At this time, Clearwire is structuring new market development work to enable the company to manage current cash resources into 2011, the company said, adding that this time span can be extended, as it is driven largely by the pace of expansion.

The company reported revenue of $20.5 million for each of the fourth quarter 2008 and the twelve months ended Dec. 31, 2008, compared with zero for the Sprint WiMAX Business for the same periods in 2007. The net loss for the quarter was $118 million, versus a loss of $108 million in the similar period a year ago.

More Broadband Direct 03/06/09:

•  Clearwire looks past Q4 loss; announces rollout sked
•  Cablevision fires back at CEA complaint over STB waiver
•  Windstream tops 1M data subscribers
•  FairPoint posts Q4 loss amid higher costs
•  RTEC picks GoBackTV for flexibility
•  ViewCast buys Ancept Media Server
•  Former Qwest CEO Nacchio seeking new trial
•  Broadband Briefs for 03/06/09



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