Clearwire experienced substantially more of almost everything in its third quarter of 2007: more subscribers, doubled revenues, and a greater loss. The company also said its proposed partnership with Sprint is off.
Both Clearwire and Sprint have plans to build WiMAX networks, and a partnership would have amplified each other’s efforts, inasmuch as combining their footprints would have automatically increased total WiMAX network coverage that much faster.
According to Clearwire, “Over the course of the parties’ discussions, Clearwire and Sprint concluded that the joint build transaction originally contemplated by the previously announced letter of intent was likely to introduce a level of additional complexity to each party’s business that would be inconsistent with each company’s focus on simplicity and the customer experience.”
The two have agreed to keep talking, however, and may find some other avenue for collaboration on WiMAX network services.
Sprint said it is moving ahead with plans to deploy its WiMAX network, called Xohm, but some analysts covering the company speculate Sprint’s interest in Xohm is cooling, especially after the departure of former CEO Gary Foresee, who was considered to be Xohm’s champion.
Meanwhile, Clearwire added approximately 49,000 net subscribers in its recently concluded third quarter, bringing its total to approximately 348,000, a 115 percent increase over the end of the third quarter of 2006, and a 16 percent increase over the second quarter 2007.
During the quarter, Clearwire launched service in Corpus Christi, Texas; Syracuse, N.Y.; Dayton, Ohio; Nashville, Tenn.; and Seville, Spain. The company ended the third quarter with approximately 14.8 million people covered by its network in 48 domestic and international markets, compared with 34 markets and 6.6 million people covered at the end of the third quarter of 2006.
Corporate revenue more than doubled to $41.3 million from $18.9 million in the same quarter a year ago.
Clearwire reported an adjusted EBITDA loss of $84.1 million in the third quarter of 2007 compared with an adjusted EBITDA loss of $23.3 million in the third quarter of 2006.
The expanding losses were driven, the company said, primarily by its ongoing investment in the construction and deployment of wireless networks in new markets, associated market launch costs and increased total subscriber acquisition costs related to the additional markets.