Clearwire discontinues spectrum sale - at least for now
Clearwire (NASDAQ:CLWR) said it no longer plans to sell any of its spectrum to raise additional funds for the company--at least not in 2011. "I view that the spectrum sale is something we don't have to consider in 2011," Clearwire interim CEO John Stanton told investors during Clearwire's first quarter earnings call.
Last year the mobile WiMAX operator said it would explore a number of funding options, including the sale of excess spectrum, to secure extra cash to finance its network buildout. However, during the call Stanton said that Clearwire's new wholesale pricing deal with Sprint Nextel (NYSE:S), which was announced last month, will bring $1 billion in cash to the company over the next two years, thus easing Clearwire's cash crunch and providing it with sufficient cash to fund operations for the next 12 months.
Stanton also said that Clearwire is in discussions with Sprint about Sprint's network modernization project and he thinks that Clearwire's spectrum in rural and suburban areas could help Sprint grow its footprint and differentiate itself from the competition. The project, which Sprint has dubbed "Network Vision," includes the deployment of new multi-mode base stations that could allow Sprint to deploy LTE. When asked for an update on Clearwire's LTE plans (the carrier tested LTE last year) CTO John Saw would only say that the company will end its LTE testing by mid-year and is pleased with the results. He added that any further announcement about the LTE trial will be made in conjunction with Clearwire's wholesale customers.
Interestingly, the company also said it saw a strong uptick in usage--in the first quarter network usage was up 40 percent. Clearwire attributed the increase to a combination of 4G device launches, increased subscriber growth and higher usage per device.
Other key metrics from the first quarter include:
Revenue: Clearwire's revenue in the first quarter was $242 million. Consolidated pro forma revenue was $258.1 million, a 142 percent increase over the company's first quarter 2010.
Buildout: Clearwire said it expanded its mobile WiMAX network in the quarter, mainly by building rural and suburban areas. The company said it now covers 130 million POPs, including two-thirds of the top 100 markets in the United States.
ARPU: Clearwire's retail average revenue per user was $46.32. The company's pro forma wholesale ARPU was $6.37.
Subscribers: Clearwire ended the quarter with 6.15 million total subscribers. The company's subscriber base at the end of the quarter consisted of 1.29 million retail subs and 4.86 million wholesale subs. Clearwire added 1.8 million customers in first quarter and 1.6 million were wholesale adds. Clearwire's wholesale subscribers are primarily 3G/4G multimode device users.
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