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Print this ArticleClearwire: TD-LTE network to go live in June 2013
15 Feb 2012 by admin in 4G, Feed, LTE, SPRINT, USA / No Comments
Clearwire (NASDAQ:CLWR) intends to have its first wave of TD-LTE 5,000 cell sites up and running by June 2013, the company said. Clearwire CEO Erik Prusch made the comments during the company’s fourth-quarter earnings conference call.Prusch said Clearwire has been working with Sprint Nextel (NYSE:S), its majority owner and largest wholesale customer, to identify sites for Clearwire’s planned TD-LTE network, which will overlay the company’s existing WiMAX network. He said Clearwire expects to begin the buildout near the end of the first quarter. Clearwire is looking to deploy its LTE Advanced-ready TD-LTE network mainly in urban areas, where traffic is heaviest.
The Clearwire chief said that “not too terribly long” after the first 5,000 sites are online, Clearwire will expand that coverage to 8,000 sites. Interestingly, he added that with the TD-LTE network Clearwire will not be as focused on POPs covered as it as with its WiMAX network, and will instead focus on how much data traffic it can transmit across its network–presumably to get as much as wholesale revenue as possible.
Under the terms of financial and network agreements Sprint and Clearwire reached in December, Sprint will pay Clearwire up to $350 million in a series of prepayments over a period of up to two years for LTE capacity if Clearwire achieves certain buildout targets and network specifications by June 2013. Sprint and Clearwire said the agreements also establish long-term, usage-based pricing for LTE services for 2012 and beyond.
Prusch also touched obliquely on the FCC’s recent decision to not allow wholesale LTE provider LightSquared to launch commercial service–a move that removes a competitor to Clearwire and could funnel additional business toward Clearwire. He said Clearwire is actively looking for new wholesale customers and that adding more is a key priority for 2012. He noted that Clearwire recently added MVNE Simplexity and “freemium” mobile broadband provider FreedomPop, which had been a LightSquared customer, as wholesale customers. Prusch said the company will continue to adopt usage-based pricing agreements when it searches for wholesale customers.
Subscribers: During the quarter Clearwire added 873,000 total net new subscribers, reflecting 904,000 net new wholesale subscribers and a net loss of 31,000 retail subscribers. (Clearwire’s wholesale subscribers consist primarily of Sprint 3G/4G smartphone customers). The company ended the fourth quarter with around 10.4 million total subscribers, up 140 percent from 4.3 million subscribers at the end of 2010. The carrier’s subscriber base consists of 1.3 million retail subscribers and 9.1 million wholesale subscribers.
ARPU: Clearwire’s retail average revenue per user was $46.69, up from $45.52 in fourth quarter of 2010. The company’s wholesale ARPU was $6.34 in fourth quarter 2011, up from $3.52 in the fourth quarter of 2010.
Churn: Clearwire’s retail churn was up slightly to 3.9 percent, up from 3.8 percent in the year-ago quarter. The company’s wholesale churn was 2.9 percent in the quarter, higher than 1.4 percent in the year-ago period. During the company’s conference call, Clearwire CFO Hope Cochran said that the increase in wholesale churn was primarily associated with Sprint’s introduction of Apple’s (NASDAQ:AAPL) iPhone in the quarter. However, Cochran said that because of Sprint’s long-term commitment through 2015 to Clearwire’s WiMAX network, Clearwire doesn’t expect revenue from Sprint to decrease dramatically over time.
Financials: Clearwire’s total fourth-quarter revenue clocked in at $361.9 million, up from $175.2 million in the year-ago period. Wholesale revenue in fourth quarter was a record $164.1 million, while retail revenue and other revenue was $197.8 million. Clearwire’s net loss for the fourth quarter was $236.8 million, wider than the net loss of $128 million in the year-ago period. Clearwire reported adjusted EBITDA of $22.5 million, compared with an adjusted EBITDA loss of $46.4 million in the third quarter. It was the company’s first positive adjusted EBITDA result and Clearwire achieved it a quarter earlier than expected.
Capital expenditures: Cochran affirmed that the cost of the LTE overlay will be $600 million. She said that Clearwire’s capital expenditures in 2012 are expected to total around $450 million to $550 million, with most of the spend occurring in the second half of the year. She also said Clearwire is close to securing $200 million worth of vendor financing and may receive more in 2012.
For more:
- see this release
- see this CNET article
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