Clearwire Posts Q1 Loss, Beats Expectations, Aims for the Future - The UpStream

Clearwire Posts Q1 Loss, Beats Expectations, Aims for the Future

posted Saturday Apr 28, 2012 by Nicholas DiMeo

Clearwire Posts Q1 Loss, Beats Expectations, Aims for the Future

This week, Clearwire sent in their Q1 report and the numbers aren't good. For those that haven't been following the Clearwire saga, you can recap it all from the first moment of glory here. Once you've discovered the basics, you can check out how Sprint is pretty much holding the company above water, why Google dropped its stake in the company and why the failed LightSquared deal could have been the best thing to happen to Clearwire.

While the potential of a Clearwire replacement for LightSquared didn't pan out, the news came after the first quarter ended. This potential expansion still didn't help Clearwire's numbers with numbers down across the board. The company reported its first loss in quarter-over-quarter total revenue this week. The good news is that the actual dollar amount of revenue beat what most analysts predicted, so I suppose that is a small uptick. The company was able to gain some dollars from Sprint selling the service directly to customers and Clearwire saw a rise in stock price over the past 12 weeks.

Sprint is still using Clearwire's 4G WiMAX network while other carriers skipped over that technology and moved right to 4G LTE. However, with the aforementioned potential LightSquared failure, Sprint has decided to basically fund the network provider to help them deploy a true 4G network in the next two years. This 4G is rumored to be true 4G LTE Advanced and will blow away the current data speeds we are seeing on other carriers today.

For Clearwire, Sprint paid them around $6 for every 4G subscriber on their service last year but has now reworked the agreement to a flat rate of $900 million for both years 2012 and 2013, no matter how many customers are actually on the network. They will also be utilizing Clearwire's towers to sell their Virgin Mobile and Boost Mobile services, which are both pre-paid options.

While revenue may be down, hopefully good things are to come with the new 4G roll-out we should see soon. Clearwire's stock price rose 5.4 percent, to $1.55 per share, after release of the results, which shows that shareholders see the value in the company long term, despite the losses for the quarter. Let's hope their 11 million subscribers agree and stick with Clear through the tough times and enjoy 100 Mb/s speeds in the near future.


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