Clearwire grows revenue and customers, and confirms new funds

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Clearwire grows revenue and customers, and confirms new funds

By CAROLINE GABRIEL

Published: 12 November, 2009

Clearwire confirmed its new $1.5bn injection of funding from its existing backers (minus Google) as it announced third quarter results, which saw a rising rate of customer additions and escalating build-out costs. Much of the WiMAX operator's success will depend on the services sold by its MVNO/investors, and one of these, Comcast, has started testing the femtocells with which it aims to differentiate its fixed/mobile offerings.

Comcast launched its High-Speed 2Go mobile broadband service, running on Clearwire's network, five months ago, initially in Portland, Oregon. The company will offer a metro plan and laptop card that works within the WiMAX footprint area, and a nationwide plan and card that offers 3G everywhere, using the Sprint EV-DO network, and WiMAX where available. The main aim is to offer quad play bundles, with their enhanced ARPU and churn resistance, to subscribers. Many of the markets in which Clearwire is going live at an early stage are key Comcast territories, such as Philadelphia, Chicago, Seattle, Dallas and Altlanta.

The cableco has confirmed what it initially let slip over a year ago, that it was testing WiMAX femtocells. Last year, Comcast's head of wireless and technology, Dave Williams, told Unstrung.com that the deal with Clearwire included a provision for 5MHz of its 2.5GHz spectrum to be set aside for femtocells. Commercial roll-out is unlikely to happen until next year, and the vendors involved in the trial have not been named, though Samsung must be a prime candidate as it already has WiMAX femtos, it is a network supplier to Clearwire, and it also provides the tiny indoor base stations to Verizon and Sprint for CDMA.

Using femtocells would be particularly attractive to the cablecos as the devices could be backhauled by their own cable lines, and because they could offset the costs of buying wholesale capacity on the main Clearwire network by creating their own hotzones in key customer bases. In turn, the arrangement would benefit Clearwire by offloading some traffic from its macro network - hardly a consideration now, with its huge horde of 100MHz of spectrum in most markets, but possibly one in future.

Clearwire itself duly received its expected $1.5bn of extra financing from Sprint, Intel, Comcast, Time Warner Cable and BrightHouse Networks, announcing this with its Q3 results. These saw it boosting revenue by 13% year-on-year, to almost $69m, generated by 173,000 WiMAX subscribers and 555,000 users in total (including its proprietary wireless broadband base, some of it being migrated to WiMAX, and its non-US bases).

The operator lost about $82m, more than its Q2 $73.4m deficit as build-out gathers pace (though less than a year earlier, when the loss was $137.6m). The firm is now live in 13 markets, most recently Philadelphia. This was reflected in a rising revenue trend - the $69m of Q3 was up 8.5% on Q2's $63.6m. Net adds across the whole base were 44,000 in the quarter, but the WiMAX-only figure was higher at 49,000. ARPU was $39.71, down slightly on Q2's $39.47.

As for the new funding, Sprint Nextel will put in the largest sum, $1bn, with the rest of the money coming from the four other stakeholders, though Google will sit out this round.