Clearwire promises two WiMAX smartphones, hints at LTE adoption

Clearwire (NASDAQ: CLWR) posted largely solid first-quarter results, showing gains in subscribers and better-than-expected financials.  The company promised to sell two Clear-branded WiMAX smartphones by year-end, and said that it has revised its WiMAX-exclusive technology agreement with Intel, thereby giving Clearwire the option of adopting LTE.

On the handset front, the company said that a Samsung Android-based "3G/4G/WiFi device optimized for heavy video and video communications use" will makes its debut this year, as well as a 3G/4G/WiFi-enabled phone from HTC.

Clearwire executives said both devices will carry the company's "Clear" WiMAX brand, and that the HTC device will be different from the WiMAX-capable, Android-based Evo 4G smartphone HTC plans to release this summer for Sprint Nextel (NASDAQ: S). Clearwire did not provide further details on the planned devices, though executives said the voice-calling service for the phones would run over Sprint's network rather than via VoIP on Clearwire's WiMAX network.

In addition, company executives said they have revised their partnership agreement with Intel, a big backer of Clearwire, allowing Clearwire more flexibility when it comes to technology choices. The original Intel agreement required Clearwire to use WiMAX, and the change means Clearwire may consider switching to LTE.  Although Clearwire CEO Bill Morrow said Clearwire had not made any decisions regarding LTE, he did say that the firm is talking to vendors about how it might inexpensively make the change.

Here's a breakdown of key metrics from Clearwire's quarter:

Subscribers: Clearwire ended the first quarter with 971,000 total subscribers: The number represents a combination of 814,000 retail (Clearwire) subscribers and 157,000 wholesale subscribers (those from Sprint, Comcast and Time Warner Cable). During the first quarter Clearwire added 283,000 net new subscribers, including 172,000 retail additions and 111,000 wholesale additions. Interestingly, Clearwire said that more than one-third of its wholesale subscribers "consist of subscribers on dual-mode devices that reside outside of our currently launched markets, but for whom we receive monthly recurring revenue." Such customers could be those subscribing to Sprint's Overdrive 3G/4G mobile hotspot.

Financials: Clearwire's revenue for the quarter clocked in at $106.7 million, up 72 percent from the carrier's year-ago quarter and above analysts' expectations of $97.18 million, according to Reuters. Clearwire's net loss reached $94.1 million, wider than the $71.1 million the carrier lost in the first quarter of 2009.

ARPU: Clearwire's retail average revenue per subscriber was $42.77 in the first quarter of 2010, up from $39.52 in the year-ago quarter

Churn: The carrier's retail monthly churn improved to 3 percent in the first quarter of 2010, down from the 3.6 percent it recorded in the fourth quarter of 2009, but up from 2.6 percent in the year-ago period.

Capex: Clearwire dramatically increased capital expenditures to $690 million in the first quarter of 2010, from $112 million in the first quarter of 2009. The carrier plans to cover 120 million POPs by the end of this year with its WiMAX network.

2010 outlook: Clearwire said it will end 2010 with more than 2 million total subscribers, and company executives promised Clearwire would reach profitability this year.

For more:
- see this release
- see this Reuters article
- see this PC World article
- see this FierceWireless Q1 earnings page

Related Articles:
Clearwire outlines summer launch plans
Sprint narrows subscriber gap in Q1, but loss widens
4G phones: The promise and the peril
Clearwire net additions soar to 87K in Q4

Read more on