Clearwire posts huge wholesale subscriber gains; revenues surge but telco fails to turn a profit

6 May 2011

US telco Clearwire has reported consolidated revenues of USD258.2 million for the three months ending 31 March 2011, representing a 142% increase year-on-year. Of this figure USD181.1 million is derived from retail revenues, whilst the remaining USD77 million comes from the operator’s wholesale services. Of the latter figure, USD16.1 million is courtesy of chief wholesale client Sprint Nextel. However, Clearwire continued to post a net loss, reporting a deficit of USD227 million for 1Q11. As of 31 March 2011, Clearwire reported a total subscriber base of 6.15 million, up 533% from 971,000 subscribers a year earlier. The subscriber base consists of 1.29 million retail subscribers and 4.86 million wholesale subscribers. During Q1 Clearwire added 1.8 million net new subscribers, including 155,000 retail additions and 1.6 million wholesale additions from clients such as Sprint, which depends on Clearwire’s network for its high speed WiMAX services. Clearwire expects to grow its subscriber base to around 9.5 million by the end-2011.

Clearwire interim CEO John Stanton commented: ‘During the quarter we made good progress toward our objective of achieving positive EBITDA in 2012 by executing new agreements with Sprint, delivering strong post-pay subscriber growth and company-best wholesale revenue growth, as well as significantly lowering our operating costs’. Erik Prusch, Clearwire’s chief operating officer, added: ‘Looking ahead, we expect to work closely with Sprint and all of our other wholesale partners to expand our 4G leadership and capitalise on our rich spectrum holdings that enable us to meet the exploding customer demand for mobile broadband internet access. Since the beginning of the year, our network has experienced a 40% increase in network usage due to expanded coverage, record subscriber growth and higher usage per device. Only Clearwire has the capacity required to deliver a truly next generation wireless broadband experience’.

United States, Clearwire