Clearwire's reported a smaller-than-expected loss in the third quarter and indicated it will handily top 10 million subscribers by the end of 2011.
The company, a wholesale 4G service provider largely for Sprint, reported a third quarter loss of $83.5 million, or 34 cents a share, on revenue of $332.2 million, up from $142.2 million a year ago. Wall Street was looking for a loss of 40 cents on revenue of $327 million.
Clearwire had a roller coaster third quarter as questions emerged about its role in Sprint's 4G network. Sprint last week said that Clearwire would be a Long-Term Evolution player and that clarified the company's role a bit.
In a statement, Clearwire CEO Erik Prusch said the company’s results indicate its wholesale strategy is working. Clearwire ended the quarter with 9.54 million subscribers, up 240 percent from a year ago. In the third quarter, Clearwire added 1.86 million wholesale customers. Third quarter revenue per user was $47.05.
As for the outlook, Clearwire said it expects $300 million in capital expenses in 2011 including an LTE rollout. That tally is $100 million less than projected.
Prusch on a conference call with analysts pushed Clearwire's LTE plans:
We recently announced our plans to overlay LTE in the high-density high usage areas of our existing markets. We believe providing LTE off of capacity in these high traffic areas will yield the biggest benefit to our customers in the most cost effective manner for the company.
We will be well positioned to leverage channel aggregation in the upcoming LTE advanced standards to build fatter channels in the near future to deliver higher speeds and more capacity for customers. It's no secret standardization drives mass adoption in the message option drives economy to scale.
Clearwire ended the quarter with $711 million in cash, equivalents and investments.
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