Time Warner: WiMAX business not 'impressive' so far

Time Warner Cable executives said the company's wireless business--which resells Clearwire's (NASDAQ:CLWR) mobile WiMAX service--has produced "not very impressive and pretty inconclusive" results. The company said it has 15,000 WiMAX subscribers.

The MSO said its wireless play is still in its early stages, and that it expects to experiment with different wireless pricing strategies. Still, the results show that Time Warner remains cool to wireless data services.

"On wireless again, I think we have been pretty consistent. We are basically exploring whether packaging wireless data with our wireline offerings is something that consumers want, and if there is a formula that people want, so we are trying different models, different products, what have you," Time Warner CEO Glenn Britt said on the company's fourth-quarter earnings conference call. "To date, I would say our results are not very impressive and pretty inconclusive. So, we are going to stick with that for a while. We are trying to spend not too much money while we are doing it."

Time Warner CFO Rob Marcus said on the call that the company is now offering wireless data service on almost 75 percent of its footprint and that it is "still early days," but that the company is "gaining key insights into the wireless business as well as the wireless needs and desires of our customers." However, he said that fourth-quarter wireless losses were around $20 million and full-year losses were around $50 million.

Clearwire issued a debt offering of $1.3 billion in December. The company is searching for other funding options as it tries to continue its network buildout, and has indicated it will offer more details about its 2011 plans in February. Clearwire, in which Sprint Nextel (NYSE:S) holds a 54 percent stake, ended the third quarter with 2.84 million total subscribers, including 1.01 million retail subscribers and 1.83 million wholesale subscribers.

Time Warner's comments "support the notion that the bulk of their (Clearwire's) wholesale customers are coming through Sprint, and that the cable companies don't appear to be big elements," SNL Kagan analyst Ian Olgeirson told FierceWireless. Olgeirson said Time Warner, which launched WiMAX service in December 2009, has never put a large emphasis on wireless, and that the company's comments do not represent a shift in strategy. "They have always maintained a posture that it doesn't appear to be a real critical element of the bundle," he said.

Time Warner spokesman Justin Venech told FierceWireless that Time Warner is pleased with its current partnership with Clearwire. During the second half of 2010, Time Warner started offering Road Runner Mobile Choice, which offers 250 MB for $19.99 per month. The company has focused on its 3G/4G plan, and currently offers Road Runner Mobile National Elite, which is unlimited 3G and WiMAX service for $39.99 for triple-play subs, $49.99 for Road Runner only subs, and $59.99 for customers who do not subscribe to Road Runner.

For more:
- see this DSL Reports article
- see this FierceCable article
- see this Seeking Alpha transcript

Related Articles:
Clearwire still pursuing spectrum sale, equity financing
Clearwire plans to raise $1.1B in debt offering
Clearwire cuts workforce, delays retail launches amid funding uncertainty
Time Warner, Comcast expanding WiMAX offerings
Time Warner may launch WiMAX VoIP offering
Time Warner open to idea of WiMAX voice service

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