Sidecut Reports

When observers look at nascent national WiMAX provider Clearwire Corp. (NASDAQ: CLWR) they see a potential competitor to big cellular providers like Verizon and AT&T in the wireless-data marketplace. But then they hear about Clearwire reselling its services through partners like Sprint, Comcast and Time-Warner Cable, and confusion sets in.

You can hear the questions sometimes during conference calls or at trade-show press conferences: Does Clearwire compete with Sprint? How can it hope to sell services against Comcast? To help you gain more understanding, our just-released CLEARWIRE BUSINESS REPORT for July, 2010 explains the details behind Clearwire’s wholesale operations, and why it may not be a bad thing if wholesale subscribers outnumber Clear-branded retail customers for the just-completed second fiscal quarter.

An excerpt from the report (which you can download immediately for just $9.95 USD):

While some observers want to see these multiple brands selling the same service as potential competitors, for Clearwire it doesn’t matter who sells the subscription because every active user on the network means more money for Clearwire’s bottom line. Though Clearwire gains more up-front money by signing up customers to its own-branded service, it must also spend marketing and operational money to get those customers. Wholesale subscriber adds, on the other hand, don’t cost Clearwire anything to obtain, so even at a discounted revenue rate (which has not been reported by Clearwire) Clearwire is still making a good margin because it doesn’t have to pay the hundreds of dollars per new user in traditional customer-acquisition costs.

There’s plenty more simple goodness like that in the approximately 3,000-word report, including details on the latest Clearwire devices (like the new WiMAX smartphones) and some intelligent discussion about the competitive threat from Verizon’s pending LTE launches later this year. Get up to speed on all things Clearwire by ordering your copy today!

Clearwire’s march toward a national WiMAX network expanded again Tuesday, with the formal launch of services in Kansas City, Washington, D.C., and (finally) the revamping of the Baltimore market, which had previously been a “live” market under the Sprint Xohm brand.

The three new cities, announced on the Clearwire web site (see press releases for Baltimore, D.C. and Kansas City) brings the total of live mobile WiMAX markets under the Clear brand to 34 in the U.S., with another 25 on tap for the remainder of 2010 including the big burgs of New York, San Francisco, Los Angeles, Miami, and… Cleveland, among others.

Bringing the Baltimore market (finally) under the Clear brand puts the final chapter in place for the Sprint-branded Xohm service, which when launched there in September of 2008 was the first big-city implementation of mobile WiMAX here in the U.S. Like in all previously launched markets, Clearwire’s coverage maps for its newest service areas include network data to give users a real-world look at where signals are strong and where they are weak — an open, honest assessment of network utility that so far no other competitor has matched.

(Clearwire map of coverage in Kansas City; credit: Clearwire Corp.)

We TOLD you there was going to be a lot of news from Clearwire today, and the company didn’t disappoint: In addition to having easily its biggest quarter ever in terms of new subscriber signups — 283,000 new additions during Q1 — Clearwire also announced some additional markets for 2010 launches and said it would have two WiMAX/3G/Wi-Fi phones before the end of the year, one from Samsung and one from HTC.

We’ll post again following the soon-to-start conference call, but since the release is out here are the most relevant stats:

Total Clearwire subscribers : 971,000
Total new subscribers added in Q1: 283,000
Total wholesale (Comcast, Sprint, Time-Warner Cable) subscribers added in Q1: 111,000
Total retail (Clear brand) subscribers added in Q1: 172,000

The wholesale part of the Clearwire equation remains the most interesting to me — be interesting to see when the wholesale numbers pass the retail numbers. An interesting nugget from the press release — some 1/3 of the new wholesale subscribers don’t even live in markets where the WiMAX service is live, but bought hybrid (3G/4G) devices perhaps in anticipation of WiMAX in their home town or to use in WiMAX markets on the road. Clearly the hybrid value proposition is already kicking in.

Total wholesale subscribers: 157,000

More after the call!

Here’s the list of new markets, lifted from the press release:

In recent weeks, the Company has expanded its 4G mobile broadband network service area with five new markets covering nearly five million people, including Houston, TX in March, and earlier this week in Harrisburg, Reading, Lancaster and York, PA.

Clearwire also today announced plans to launch 4G mobile broadband service in 19 additional cities this summer, including previously announced markets Kansas City, KS; St. Louis, MO; Salt Lake City, UT, and the core area of Washington, D.C. and newly announced markets Nashville, TN; Daytona, Orlando and Tampa, FL; Rochester and Syracuse, NY; Merced, Modesto, Stockton, and Visalia, CA; Wilmington, DE; Grand Rapids, MI; Eugene, OR; and Yakima and Tri-Cities, WA.

In addition, the Company reiterated its plans to launch Clearwire’s 4G network in other major markets across the country by the end of 2010, including New York City, Los Angeles, Boston, Denver, Minneapolis, the San Francisco Bay Area, Miami, Cincinnati, Cleveland and Pittsburgh.