Tuesday, August 3, 2010

Clearwire Cites Sales Surge, Adds 722,000 Subscribers in Q2

Clearwire added 722,000 net subscribers in Q2, bringing the total number of customers on the network to 1.7 million. Of this, wholesale customer additions for the quarter were 595,000, bring the number of wholesale customers to 752,000 at the end of the quarter -- and the number of wholesale customer subsequent surged past the one million mark during July.

As a result of the strong sales, Clearwire has increased it guidance for the full year.

"As of today, Clearwire has more than one million wholesale subscribers and just under one million retail subscribers on the country's first 4G network. By the end of 2010 we now expect to have approximately 3 million total subscribers, a significant increase from our previous guidance of just over 2 million subscribers. The pent up wave of demand for mobile broadband service is evident, and Clearwire is riding our expanding 4G network and growing wholesale distribution model towards a promising second half of 2010," said Bill Morrow, Clearwire's CEO.

Clearwire said the dramatic increase in wholesale subscribers includes users of multi-mode 3G/4G devices in areas where it has not yet launched 4G service but from whom it receives nominal revenue. As of June 30, approximately 52% of the company's wholesale subscribers resided outside of Clearwire's currently launched markets.

At the end of the second quarter, Clearwire's global network covered areas where approximately 62 million people reside, including international and domestic pre-4G coverage. The Company's domestic 4G coverage reached approximately 56 million people as of June 30.

Revenue for the second quarter was $122.5 million, a 93% increase over second quarter 2009 revenue of $63.6 million. Retail average revenue per subscriber (ARPU) was $41.58 in the second quarter. While wholesale subscriber growth was strong, wholesale revenue reflects the impact of nominal pricing for wholesale subscribers outside of our markets, and includes only one month of results from the strong launch of the Sprint HTC EVO on June 4.

Retail cost per gross subscriber addition (CPGA) improved to $443 in the second quarter, down from $524 in the second quarter 2009. Retail monthly churn was 3.2% in the second quarter.

The second quarter 2010 net loss attributable to Clearwire was ($125.9) million, or ($0.61) per basic share, and includes the impact of $79.0 million incurred in the second quarter, or ($0.09) per share, related to inventory allowance increases and write-offs. The second quarter 2009 net loss attributable to Clearwire was ($73.4) million, or ($0.38) per basic share.