Tuesday, May 4, 2010

Clearwire Sees Growing Demand for its WiMAX

Clearwire ended Q1 with 971,000 total subscribers consisting of 814,000 retail subscribers and 157,000 wholesale subscribers. The company added 283,000 net new subscribers in Q1 including 172,000 retail additions and 111,000 wholesale additions. Greater than one-third of wholesale subscribers consist of subscribers on dual mode devices that reside outside of Clearwire's currently launched markets.

"Customer demand for 4G services is truly making 2010 the year of mobile broadband, as always-on true mobile broadband keeps people connected to the information, services and applications that matter most," said Bill Morrow, CEO of Clearwire. "With record breaking subscriber growth, a robust wholesale "network of networks" approach to 4G, and customer usage that far surpasses anything seen on 3G networks today, Clearwire is standing at the forefront of the next evolution in telecommunications and technology."

Revenue for Q1 2010 was $106.7 million, a 72% increase over first quarter 2009 revenue of $62.1 million and a 33% increase over fourth quarter 2009 revenue of $79.9 million. Retail ARPU was $42.77 in the first quarter 2010. Retail ARPU in the first quarter includes the positive impact of $1.22 related to a prior period adjustment to account for incentive discounts over the lives of customer contracts. Without this adjustment first quarter ARPU was $41.55.

Retail cost per gross subscriber addition (CPGA) improved to $439 in the first quarter 2010, down from $624 in the fourth quarter 2009. The decline in CPGA is largely a function of greater gross additions, better overall marketing efficiencies and fewer market launches.

Retail monthly churn also improved to 3.0% in the first quarter 2010 compared to 3.6% in fourth quarter 2009. During the first quarter, the Company completed the conversion of the Hawaii, Seattle and Carolina markets to its 4G network, and the subscriber churn rate in the non-conversion markets was 2.7%.

2010 Business Outlook

Clearwire continues to expect to cover up to 120 million people with its 4G network by the end of 2010. Within this footprint, services will be offered under both the CLEAR(R) brand name, and those of the Company's strategic wholesale providers which will vary across individual markets.

Clearwire also continues to expect that total subscriber levels will triple in 2010 from the end of 2009 levels and that it will end 2010 with more than 2 million total subscribers. The company expects average 2010 retail CPGA to be in the mid $500's and consistent with the average CPGA for 2009, while average retail ARPU is now expected to remain above $41.00 for 2010.

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