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Clearwire gains subscribers, remains in the red

Stephen Lawson | Feb. 17, 2011
Clearwire gained 1.5 million subscribers in the fourth quarter of 2010 and more than doubled its revenue, but lost $128 million, the mobile WiMax operator announced Thursday.

Clearwire said its network now reaches 119 million potential subscribers around the U.S., nearly meeting the company's target of 120 million by the end of 2010. Clearwire has been struggling to continue the expansion of its network while losing money. After its third-quarter report, the company announced it would lay off 15% of its staff, delay the introduction of its first branded smartphone, and cut back marketing and advertising efforts, among other cost-cutting steps. Those moves came even after Clearwire had reported nearly a doubling in subscribers and a 114% gain in revenue.

Despite that third-quarter growth, Clearwire lost $139 million in the quarter. The company raised about $1.4 billion through a debt offering in early December but kept its austerity measures in place.

The carrier expects its network to cover 130 million people in the U.S. by the middle of this year, with further expansion dependent on raising more capital. The buildouts will occur mostly in rural areas, partly because of the requirements of its spectrum licenses, but the company said it may also add some capacity in large cities as needed.

Clearwire expects to achieve positive EBITDA (earnings before interest, taxes, depreciation and amortization) in 2012, it said.

The financial report was the first for Clearwire under its new chairman, John Stanton, who was elected by the company's board of directors in January. He succeeded Craig McCaw, who founded the original Clearwire wireless broadband company.

 

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