Clearwire Starts Testing LTE; Expects To Hit 3 Million Subs By Year End


Credit: Clearwire

As part of its second-quarter financial results today in which Clearwire (NSDQ: CLWR) raised its guidance significantly, the company confirmed it will begin testing the competing 4G standard being used by Verizon Wireless. Clearwire’s CTO John Saw explained: “Part of our technical due diligence at Clearwire is to be prepared to leverage a number of possible opportunities as we future-proof our network, and that’s the goal of these tests.”

For quite some time, critics have wondered if Clearwire would switch from using WiMax to LTE. The choice was obvious initially because WiMax was the only technology available when Clearwire started to build out its network. Now LTE has become more popular as more carriers commit to rolling out 4G.

Clearwire said the tests will be conducted in the fall and in early 2011 in Phoenix and will involve a number of infrastructure providers, including Huawei, Samsung and Beceem. The company said the tests are expected to “demonstrate that Clearwire’s 4G network can deliver significantly higher performance using LTE technologies than any other operator.” The tests will also investigate scenarios in which both LTE and WiMAX radio technologies are being used. In today’s conference call, Clearwire’s CEO Bill Morrow said he expects the LTE tests to get speeds between 20 to 70 mbps vs. the 5 to 12 mbps reported by others. Clearwire is capable of getting the higher speeds because it has more spectrum, which translates into a fatter pipe.

At the end of the second quarter, Clearwire had a total of 1.7 million total subscribers with the addition of 722,000 total net new subscribers, including 127,000 retail additions and 595,000 wholesale additions. The wholesale additions came from partners, like Comcast (NSDQ: CMCSA), Sprint (NYSE: S) and Time Warner (NYSE: TWX). In all, it said it had 940,000 retail subscribers and 752,000 wholesale subscribers. About half of Clearwire’s wholesale subscribers include customers who have 3G/4G devices, like the HTC EVO 4G on Sprint’s network, but are not in a market where 4G service has been rolled out.

The company currently covers 56 million people with its 4G service, and expects to more than double that foot print to 120 million people by the end of the year. The company said it is now expecting to have about three million subscribers by the end of the year, up from more than two million.

Clearwire’s Q2 revenues totaled $122.5 million, up 93 percent over the year ago period. The company’s net loss was $125.9 million, or 61 cents a share.

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