In its first quarterly financial report since completing the Sprint transaction,
Clearwire outlined the rollout plans for its 4G WiMAX network, including upgrades for the markets it currently serves using pre-WiMAX technology. Clearwire targets total net cash spend in the range of $1.5 to $1.9 billion for 2009. Mobile WiMAX launches are planned this year in Atlanta, Las Vegas, Chicago, Charlotte, Dallas/Ft. Worth, Honolulu, Philadelphia, and Seattle. Cities on the 2010 launch list include New York, Boston, Washington, D.C., Houston and the San Francisco Bay Area.
The company is currently engaged in the development and construction of mobile WiMAX networks covering 75 million people, as well as the long lead time cell site development work necessary to cover an additional 45 million people, giving the company the ability to cover 120 million people by the end of 2010.
However, the ultimate timing of its network build-out will largely be driven by the company's market by market success and the availability of additional capital. Specifically, Clearwire is structuring development work so as to manage current cash resources into 2011, although this time period can be extended as it is driven largely by the pace of expansion.
Clearwire also reported strong sales in Portland -- its first mobile WiMAX market -- with initial sales more than double any of its prior 47 market launches with pre-WiMAX technology. Clearwire expects ARPU to be sustained over this period, but anticipates that churn will increase in its pre-WiMAX markets as the company transitions these networks to mobile WiMAX technology.
Overall for Q4 2008, Clearwire reported pro-forma consolidated revenue of $59.7 million in Q4 2008, versus $45.4 million for the same quarter of 2007. The growth in revenue was driven primarily by Clearwire's larger pro forma subscriber base, which has increased to approximately 475,000 at the end of the fourth quarter 2008, up from approximately 394,000 at the end of the fourth quarter 2007.
"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. This means retaining the flexibility to accelerate or decelerate our expansion based on our own successes and the macro economic environment. Our job is also to provide innovative products and services that give consumers more for less, which is more important than ever given the state of our economy. Our early results in Portland indicate we are doing just that," said Benjamin G. Wolff, chief executive officer of Clearwire.
In addition to announcing network expansion plans, Clearwire also announced plans to offer a dual-mode 3G/4G wireless modem in the summer giving Clear customers a national data footprint with Sprint's 3G network. The modem will be sold by Clear and Sprint and automatically switch between WiMAX service and Sprint's 3G network. The company also plans to launch a personal hot spot, a Clear accessory which combines the mobility of WiMAX with the ubiquity of Wi-Fi. Expected to be available at the end of March, the device when paired with the Clear 4G service will open the Clear 4G network to hundreds of Wi-Fi enabled products.
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.
http://www.clearwire.com
