Clearwire boasted about its market launches, including 11 new mobile WiMAX markets in the third quarter, and also trumpeted its relationships with its wholesale partners Sprint Nextel, Comcast and Time Warner Cable. Clearwire CEO Bill Morrow said that the company is "ramping up our systems to be able to support even more wholesale customers."
The company reiterated that it expects to cover 30 million POPs in 25 4G WiMAX markets by year-end, and have 120 million POPs covered by the end of 2010. Speaking about Clearwire and its wholesale partners, Morrow said, "We share a common vision of providing a new category of Internet service unmatched by today's standards."
The earnings announcement comes on the same day that Clearwire confirmed it will be receiving more than $1.5 billion in additional funding. Sprint, which holds a majority percent ownership stake in Clearwire, will contribute the most new funding, with equity financing of $1.176 billion. Comcast will contribute $196 million, Time Warner Cable will add in $103 million, Intel will contribute $50 million, Eagle River will chip in $20 million and Bright House Networks will provide $19 million. Clearwire also said that equity investors have committed approximately $240 million in debt funding.
Noticeably absent from the group of investors is Google, which was part of the group of investors that provided Clearwire with $3.2 billion in funding last year. Google said it will not be providing new financing, and that it could best help the company by working with it on products and strategy. Morrow dismissed concerns about Google's lack of funding support. "Google believes in us and they are supporting us from a product management and strategic point of view," he said. "I wouldn't read anything negative into that whatsoever."
Here's a breakdown of Clearwire's key metrics in the third quarter:
Financials: Clearwire posted a loss of $82.42 million, wider than the loss of $72.7 million in the year-ago quarter. Revenue rose 13 percent to $68.8 million in the quarter.
Net subscriber adds: Clearwire had 44,000 net subscriber additions in the quarter, surging up from 8,000 in the year-ago period. The company had a total subscriber base of 555,000, up 18 percent from the year-ago period and up from 511,000 in the second quarter. Clearwire said at the end of September it had 173,000 subscribers in its Clear 4G markets.
ARPU: Clearwire's average revenue per user was $39.71, down from $40.43 in the third quarter of 2008, and up slightly from $39.57 in the second quarter. The company said that the decline in ARPU on a year-over-year basis was due to increased promotional discounts as a result of higher gross subscriber adds.
Churn: Consolidated churn was 3.1 percent, up slightly from 3 percent in the year-ago quarter. The company continues to believe that churn will increase in its pre-WiMAX markets as its transitions the networks to mobile WiMAX.
CPGA: Cost per gross add was $563, up substantially from $404 in the third quarter last year. The company said that selling, general and administrative expenses increased to $145.3 million compared to $112.8 million for the third quarter 2008, due to higher sales expense related to higher gross subscriber additions and higher marketing expense in 4G markets. Clearwire said that CPGA will increase, particularly in the fourth quarter, as new markets are launched.
- see this release
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Article updated Nov. 24 to reflect accurate information about Clearwire's year-ago loss.