Clearwire CFO: WiMAX network to generate more revenue than expected
Clearwire's (NASDAQ:CLWR) WiMAX network may make money for the company longer than initially expected. Clearwire CFO Hope Cochran said that the company is signing up wholesale customers for the WiMAX network, giving the WiMAX network a longer lifespan and more revenue than previously expected.
Speaking today at the Bank of America Merrill Lynch 2012 Media, Communication and Entertainment conference, Cochran said that while these wholesale customers plan to transition to LTE, they will provide the WiMAX network with a "longer revenue tail than I anticipated." Cochran noted that partner Sprint Nextel (NYSE:S), which is Clearwire's largest wholesale customer, plans to transition to a usage-based model for the WiMAX network in 2014, and that having these additional wholesale partners will help with that transition.
Earlier this week Clearwire signed a wholesale deal with EarthLink that will allow EarthLink to launch consumer-facing mobile WiMAX and LTE services in 2013. In addition, Clearwire has WiMAX wholesale deals with FreedomPop, Jolt Mobile, H2O Wireless and Voyager Mobile. Earlier this this year Clearwire signed a wholesale deal with Cricket provider Leap Wireless (NASDAQ:LEAP). However, Cricket plans to only use Clearwire's TD-LTE network when it launches in 2013.
In late December, Sprint and Clearwire agreed to shift to a usage-based pricing model for WiMAX services in 2014. However Sprint will continue to have access to Clearwire's WiMAX network through at least 2015.
Interestingly, Cochran was asked about whether Clearwire is working with Dish Network, which in 2011 paid $2.78 billion for S-band MSS spectrum. Dish has said it plans to use the spectrum to build an LTE Advanced network by 2016. Cochran said that everyone in the industry is curious about what Dish might do but declined to say whether Clearwire is directly working with the company.
"We talk to everyone," Cochran said. "If we think we might have good ways to help him [Dish Chairman Charlie Ergen] and work with him, then we will reach out to him."
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