Clearwire WiMax struggles to profit on

Clearwire gained 1.5 million subscribers in the fourth quarter of 2010 and more than doubled its revenue, but lost 128 million, the mobile WiMax operator announced last week.

The company ended the year with 4.4 million subscribers, up from a year earlier 688,000. Approximately 1.1 million of those were customers of the retail service of Clearwire, called clear, while 3.3 million acquired the WiMax network service through partners such as Sprint Nextel and Comcast. The company gathers much less revenue from wholesale to retail subscribers and previously revealed disputes with Sprint over that of revenue. Financial in its press release, Clearwire said it believes that a solution of those problems with Sprint is imminent.

Because the company is focused on preserving cash, his plans for a brand smartphone remain pending, executives said in a conference call following the report. Clearwire plans only modest network expansion this year, but aims to double its subscribers to 8.8 million by early 2012, they said.

Possible new partners

Clearwire has had discussions with various parties interested in acquiring some of the spectrum of society, making a strategic investment, or both, said CEO Bill Morrow. Would strictly a strategic investment. The company has put off a decision on these deals in order to concentrate on the resolution of the dispute wholesale revenue, but intends to announce a decision in the second quarter, said Morrow.

The quarterly report came amid indications that Sprint, the majority owner of Clearwire and the largest retailer of its 4 G services, may be planning to build a 4 G network using LTE (Long Term Evolution). Clearwire has tested LTE and hinted it could deploy technology in addition to WiMax, but recent comments by networks of Sprint Chief indicated that Sprint is interested to go it alone.

Morrow neglected suggestions a rift, saying that he often speaks with Sprint CEO Dan Hesse.

"The relationship is strong and healthy," Morrow said. "We are working very well together and we share a common vision for the future". If Sprint embark on an expansion of the network apart from Clearwire, will have no effect on the relationship between carriers, he said.

In the meantime, Clearwire is working with silicon vendors to promote the development of multimodal chipset that could work with both WiMax and LTE. Clearwire expects new phones with the ability to be on the market later this year. Some observers believe that t-Mobile USA may be interested in becoming a wholesale partner of Clearwire and/or purchase some of its excess spectrum.

Expansion on target

Clearwire said that his network reaches 119 million potential subscribers around the United States, almost meeting the company's target of 120 million by the end of 2010. Clearwire has been struggling to continue the expansion of its network while losing money. After his report of the third quarter, the company announced it would lay off 15 percent of its staff, delaying the introduction of its first smartphone brand and cut marketing and advertising efforts, among other cost reduction measures. Those moves came after Clearwire reported almost a doubling subscribers and a gain of 114 percent of revenue.

Despite this growth in the third quarter, Clearwire lost 139 million in the quarter. The company raised approximately $ 1.4 billion through a debt offering in early December, but kept its austerity measures in place.

The carrier expects its network to cover the 130 million people in the United States by mid of this year, with further expansion depends more on the raising of capital. The buildouts occurs mainly in rural areas, partially due to the requirements of its spectrum licences, but the company said that it can also add some ability in large cities as needed.

Clearwire expects to obtain positive EBITDA (earnings before interest, taxes, depreciation and amortization) in 2012, he said.

The financial report was the first to Clearwire under its new President, John Stanton, who was elected by the Board of Directors of the company in January. By Craig McCaw, who founded the company broadband wireless Clearwire original.

Stephen Lawson covers mobile technologies, storage and networking for the IDG News Service. Follow Stephen on Twitter at @ sdlawsonmedia. E-mail address of Stephen is stephen_lawson@idg.com