Clearwire added just 12,000 net subscribers in the second quarter, a significant drop from the 25,000 subscriptions the company added in the first quarter. The net adds include losses of pre-WiMAX subscribers.
Shares of the company fell on Wednesday after the company reported its results the night before. Raymond James analyst Ric Prentiss downgraded the operator to "market perform" from "outperform," citing concern over increased competition and spending. He said operators like Verizon Wireless, which is aggressively rolling out LTE technology, are a competitive threat. Prentiss also thinks Clearwire might look for more funding, as much as $2.3 billion, to expand the mobile WiMAX network.
CEO William Morrow told Sidecut Reports that the subscriber additions were actually better than what the company expected because the company basically had one live mobile WiMAX market--Portland--and was intentionally pulling back on its marketing activities in its 50 pre-WiMAX markets. Atlanta and Las Vegas went live with mobile WiMAX before the end of second quarter.
"We fully expected the [subscriber adds] number to be lower than Q1, and in fact it was better than we thought," said Morrow. "It was a bit of a transitional quarter to us, with new markets just being launched."
During the company's conference call, Morrow said Clearwire's fourth-quarter subscriber additions should exceed all other 2009 quarters combined. He was particularly upbeat about the wholesale side of the business as Comcast recently announced its intentions to be aggressive in rolling out WiMAX offerings and Sprint has the intention of selling WiMAX as part of its 3G/4G hybrid service offerings.
The company posted a $73.37-million loss on revenue of $63.59 million. It also plans to add 800 employees and launch in 25 markets total by the end of 2009. It also doesn't sound like Clearwire will be breaking out mobile WiMAX vs. pre-WiMAX subscribers any time soon.
Clearwire expects to offer mobile WiMAX service in markets covering 30 million people at the end of this year including in the following markets: Atlanta; Baltimore; Boise; Chicago; Las Vegas; Philadelphia; Charlotte, Raleigh, and Greensboro, N.C.; Honolulu and Maui, Hawaii; Seattle and Bellingham, Wash.; Portland and Salem, Ore.; and Dallas/Ft. Worth, San Antonio, Austin, Abilene, Amarillo, Corpus Christi, Killeen/Temple, Lubbock, Midland/Odessa, Waco and Wichita Falls, Texas.
Mobile WiMAX now in 12 Clearwire markets (albeit several small ones)
Clearwire unofficially offers WiMAX in Las Vegas
Clearwire will launch at least eight markets in 2009