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Even as the financial losses pile up, its stock price drops and the credit market is tight to nonexistent, Clearwire said March 5 it still plans to roll out 4G WiMax networks in eight cities in 2009 and add at least another four markets in 2010.
Clearwire and Sprint Nextel are the only two U.S. carriers betting on WiMax to deliver 4G wireless broadband. Verizon Wireless and AT&T, the nation’s two largest carriers, are betting on a rival technology called LTE for their 4G networks. Both WiMax and LTE allow for the delivery of last-mile wireless broadband access, promising faster download speeds than current cellular networks.
“With a robust pipeline of cell sites under development, we are working to significantly extend our wireless 4G network to many more markets, giving us the ability to cover as many as 120 million people with true broadband mobility by the end of 2010,” Clearwire CEO Benjamin Wolff said during a conference call.
Wolff said Clearwire plans to build WiMax networks this year in Atlanta; Las Vegas; Chicago; Charlotte, N.C.; Dallas/Fort Worth; Honolulu; Philadelphia; and Seattle. Cities on the 2010 buildout board include New York, Washington, D.C., Boston and San Francisco.
Sprint Nextel opened the original U.S. WiMax market in Baltimore last year. Following a merger that saw Sprint turn over its entire 2.5GHz spectrum holdings and its WiMax-related assets, including its Xohm division, to Clearwire, the newly branded Clear Jan. 6 rolled out a WiMax network in Portland, Ore.
As part of the merger deal, Clearwire also brought in $3.2 billion in WiMax investments from Comcast, Intel, Time Warner Cable, Google and Bright House Networks. Comcast, Intel and Google have already taken write downs on their WiMax investments as Clearwire’s stock price has plunged.
“In this difficult economic climate, our objective is to continue to balance the prudent use of our significant financial resources with our desire to take full advantage of the market opportunity that is in front of us, and we intend to do just that,” Wolff said. “This means retaining the flexibility to accelerate or decelerate our expansion based on our own successes and the macro economic environment.”
These are, indeed, difficult financial times for Clearwire. The company reported a $118 million fourth-quarter loss on revenue of $20.5 million. For the year, Clearwire lost $432.6 million. The current scarcity of credit has led a number of analysts to speculate that Clearwire will have difficulty raising the funding needed for a full national WiMax rollout.
“Our job is also to provide innovative products and services that give consumers more for less, which is more important than ever, given the state of our economy. Our early results in Portland indicate we are doing just that,” Wolff said. “As we move into 2009, we are expanding our network to support the rapidly growing consumer appetite for 4G mobile broadband services.”
Verizon Wireless, a joint venture between Verizon and Vodafone, said in February it is field testing 4G LTE networks in Minneapolis, Minn.; Columbus, Ohio; and Northern New Jersey. In addition, testing is being conducted in Budapest, Dusseldorf and Madrid in Europe. According to Verizon Wireless, the field trials showed download rates of 50M- to 60M-bps peak speeds, though the company warned that actual average download results will not be determined until the commercial launch of the new network.
Verizon Wireless said once the initial LTE rollout is complete, plans are in place for aggressive 2010 deployment throughout Verizon Wireless’ entire network, including areas not currently covered by the existing Verizon Wireless footprint.