Clearwire, the WiMAX operator that was formed as a joint venture by several companies yet is 54% owned by Sprint, has yet to make any money. They’re in trouble, and it’s why they’re looking to offload some spectrum to T-Mobile or at least partner with them so that they can get some much needed funds to expand. They’ve gone so far as to test out LTE equipment, posting a video on YouTube of speed tests that give them nearly an order of magnitude improvement over what’s achievable today, just to appease shareholders. We’ll know within 6 months whether or not Clearwire will make the switch to LTE technology, but before we get ahead of ourselves let’s see how they performed during Q4 2010.
How much money did they lose? About $128 million, which is worse than Q4 2009 when they managed to lose “only” $99 million. Revenue has more than doubled however, hitting a little over $180 million, but that doesn’t really mean much if you need to borrow money to let the company keep on running. In terms of users Clearwire now has 4.4 million of them, up from 688,000 in the same quarter a year ago, and Clearwire is ambitious enough to predict that they’ll have 8.8 million by the end of this year. They’re not kidding themselves though when it comes to posting guidance about actual profits. They don’t expect to see any until 2012. Does that mean early, mid, or late? We’ll just have to wait and see.
Regardless of all the mistakes Clearwire made, from picking WiMAX, to buying spectrum that’s quite terrible in terms of signal propagation, to competing with wholesale partners via their own separate retail channel, the one thing they got right was that they built a network that everyone could use. It’s why I’m hoping that LightSquared, which is pretty much Clearwire, but will actually use LTE from the beginning, actually takes off and becomes successful.