Clearwire's net loss grew in the second quarter compared with a year ago, but it also added more subscribers than expected, ending with 1.7 million wholesale and retail subscribers.
Clearwire added 722,000 net new subscribers during the second quarter. The WiMAX service provider now has more than 1 million wholesale subscribers and just under 1 million retail subscribers, and it raised its estimates, now expecting to end the year with about 3 million total subscribers.
In a conference call with analysts yesterday, Clearwire CEO Bill Morrow said the company is looking for sources of further financing as it works past the first 120 million POPs built out, and while it's not in a big hurry, sources may include existing or new investors and possibly selling spectrum that it doesn't need.
It's Clearwire's valuable spectrum positioning that it hopes to parlay into what could become a 4G offering that rivals what's offered today and what Verizon Wireless will be offering in the not-so-distant future with LTE. Clearwire also announced yesterday it plans to test a combination WiMAX and LTE network in Phoenix, Ariz.
Clearwire will be testing 20 megahertz channels that it expects will result in 20 to 70 megabits per second speeds in the real world, which compares with the 5 to 12 megabits per second that its competitors are expected to get with their 4G offerings.
In an interview, Clearwire chief commercial officer Mike Sievert said it's been an important part of Clearwire's strategy since Morrow arrived to remain technology agnostic so that what it offers translates into a differentiated experience that customers can't already get elsewhere.
Sievert said there's nothing in particular about Phoenix that led the company to conduct the trials there other than it's an expedient place to do it.
And while Sievert is anxious to tell the world about the smartphones that Clearwire expects to offer later this year, he couldn't reveal anything new beyond what the company has already said – that it's working with Samsung and HTC for Clear-branded smartphones. He added that the company believes smartphones will be an important component for its future.
Earlier yesterday, Clearwire announced the launch of the iSpot, a personal 4G hotspot with dedicated support for Apple's line of mobile devices, including the iPad, iPod Touch and iPhone. The product wasn't developed with direct involvement with Apple, but it is specifically built for Apple's products. Clearwire also offers the Clear Spot, a portable Wi-Fi hotspot for any device.
Similar to what LightSquared is trying to do, Clear is targeting wireless operators, retailers and others as wholesale customers of its network, and it just added Best Buy and Cbeyond to its roster. When asked about LightSquared during the conference call with analysts, Morrow said Clearwire likes the fact that it has arrived on the scene.
LightSquared doesn't plan to use its own brand of services, but its model is similar enough to Clearwire's to serve as an advertisement for Clearwire, which views its spectrum position as superior. Morrow said anyone looking to invest can see that Clearwire has a head start.
Here are some other metrics that Clearwire reported:
- Its second-quarter net loss was $125.9 million, compared with a 2009 second-quarter net loss of $73.4 million.
- Revenue for the second quarter was $122.5 million, a 93 percent increase over second-quarter 2009 revenue of $63.6 million.
- Retail ARPU was $41.58.
- Retail cost per gross subscriber addition (CPGA) improved to $443 in the second quarter, down from $524 in the second quarter of 2009.
- Retail monthly churn was 3.2 percent in the second quarter.
- Clearwire's domestic 4G coverage reached about 56 million people as of June 30. It still expects to cover 120 million POPs by the end of this year.
- Higher network expansion activities led to an increase in capital expenditures to $622 million in the second quarter of 2010 and $1.3 billion for the six months ended June 30, compared with capex of $251 million for the second quarter of 2009.