NEW ORLEANS--WiMAX carrier Clearwire (NASDAQ:CLWR) used the CTIA Wireless show here to make one point very clear: It's staying in the retail business and will continue to push that effort for the foreseeable future.
The news is noteworthy considering much of the interest around Clearwire has been focused on its wholesale business, where it sells capacity on its WiMAX network to companies like Sprint Nextel (NYSE:S). And Clearwire's wholesale business represents the bulk of its subscriber base: During the first quarter Clearwire added 586,000 total net new subscribers. Approximately 537,000 of those were net new wholesale subscribers and 49,000 were net new retail subscribers. Clearwire ended first quarter with 11 million total subscribers, which consisted of 1.3 million retail customers and 9.7 million wholesale customers (the majority of its wholesale customers are Sprint 3G/4G smartphone users).
Moreover, during much of 2011 Clearwire quit advertising for its Clear-branded retail business in an effort to conserve cash. Indeed, some questioned whether Clearwire's retail business was putting to much pressure its wholesale business since it essentially represented Clearwire's attempts to compete with its wholesale customers.
Now though, thanks to Clearwire's renewed deal with Sprint and the extra funds it has managed to raise, Clearwire is in the midst of rekindling its retail effort in a bid to add a reliable revenue stream to its wholesale operations.
"The retail business is alive and well," proclaimed Dow Draper, senior vice president and general manager of retail for Clearwire. Draper met with press at the CTIA show in order to outline Clearwire's retail operations.
Last year Clearwire sold postpaid WiMAX services through its Clear-branded retail business and prepaid services through its Rover brand. The carrier shuttered the Rover brand last year and revamped its Clear-branded operations to a prepaid model. The company now offers day, week and monthly prepaid options and two different speed tiers: $50 for full-speed WiMAX and $35 for 1.5 Mbps speeds. Draper said only those subscribers on the carrier's monthly plans are counted in its quarterly subscriber reports, and he said the vast majority of the carrier's customers use its full-speed $50 plan.
Draper said dealer uptake of the carrier's newly refreshed retail offerings has been "phenomenal."
In order to increase interest in Clearwire's Clear-branded products, Draper said the carrier started advertising on radio and cable TV in February.
On devices, Clearwire currently offers a USB modem, a mobile hotspot and a home modem. Draper said the carrier doesn't have any plans to offer a WiMAX smartphone.
And what of LTE? Clearwire is working to upgrade its network from WiMAX technology to LTE technology, and plans to deploy 5,000 TD-LTE hotspot sites in 31 top tier markets by June 2013. Clearwire will continue to support WiMAX through at least 2015.
"When it makes sense to add LTE to the retail mix, we'll do that," Draper said, explaining that the carrier hasn't made an official decision to add LTE to its retail business when available, but would consider such a move.
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