Clearwire claims 173,000 WiMax users

The wireless broadband company says it's set to reach 2010 deployment goals with newly announced funding

Wireless broadband provider Clearwire had about 173,000 WiMax subscribers at the end of September and should be able to offer service to 120 million potential subscribers in the U.S. by the end of next year, the company said Tuesday.

The count of WiMax subscribers covers both markets where Clearwire is setting up shop for the first time with its WiMax service, called Clear, and those where the new technology replaced earlier pre-WiMax wireless broadband networks, according to company spokesman Mike DiGioia.

It includes subscribers who bought the service from Clearwire as well as from resellers such as Sprint Nextel and Comcast. The figure was disclosed in the company's financial results for the third quarter ended Sept. 30.

Clearwire is constructing the first national 4G (fourth-generation) mobile data network across the U.S. using WiMax, building it out in advance of planned networks from bigger rivals Verizon Wireless and AT&T that will be based on the rival LTE (Long-Term Evolution) technology.

Clearwire claims its WiMax network can deliver between 4Mb per second (Mbps) and 6Mbps to subscribers at home and around covered areas.

"We continue to believe that we are in the right place at the right time," said CEO Bill Morrow. "We will gain our fair share of this brand-new market opportunity."

Executives said on a conference call Tuesday that the carrier is on track to put its WiMax network within range of about 30 million U.S. residents this year and 120 million by the end of 2010. Earlier in the day, it had announced more than US$1.5 billion in new funding from key partner companies.

Majority owner Sprint Nextel, along with Intel, Comcast, Time Warner Cable, Bright House Networks and Eagle River Holdings, invested a total of $1.564 billion in exchange for newly issued Clearwire shares.

Along with new debt that Clearwire also said it plans to issue, the company should raise virtually all the capital it needs to reach its year-end 2010 goal, executives said on a conference call about Clearwire's third-quarter financial results. It has approximately $2 billion in cash and short-term investments now.

Morrow cautioned analysts on the conference call not to read anything into the fact that Google, which was an initial investor in Clearwire, didn't participate in the latest funding round. Google is still actively involved with Clearwire, he said.

Clearwire lost about $82 million in the quarter. Revenue was nearly $69 million, up 13 percent from a year earlier, Clearwire said. The company already counted about 555,000 subscribers worldwide in the third quarter ended Sept. 30, with most of those using the pre-WiMax networks.

At the end of the quarter, Clearwire was selling WiMax service in 13 markets, including Las Vegas, Atlanta, and Portland, Oregon.

Within those 13 markets, the company said it added 49,000 net new WiMax subscribers in the quarter. Overall, its subscriber ranks grew by only 44,000, because the pre-WiMax networks lost customers, the company said. Clearwire said it has cut back on marketing for its older networks.

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Stephen Lawson

IDG News Service
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