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Wednesday, May 9, 2007 - Page updated at 12:00 AM

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Post-IPO Clearwire sees wider loss, more revenue

Seattle Times technology reporter

Clearwire reported quarterly results Tuesday night for the first time since going public in March, and the significant numbers all grew: revenues, subscribers and losses.

Clearwire, backed by wireless entrepreneur Craig McCaw, is building a nationwide network to provide broadband Internet access wirelessly.

The Kirkland company's results will be discussed during an early-morning conference call today between executives and Wall Street analysts.

In the first quarter, the company lost $92.6 million, or 64 cents a share, on revenues of $29.3 million. In the same period a year ago, it lost $55.3 million, or 73 cents a share, on revenues of $22.7 million.

Between the two periods, Clearwire's revenues increased 28.7 percent, while the net loss rose nearly 68 percent.

Clearwire said there were a number of key elements that pointed to a growing business opportunity.

It said it added about 52,000 subscribers during the first three months of 2007 to bring the total to 258,000, a 41 percent increase over the same period a year ago.

It also reported fairly low customer turnover, known as "churn" in the industry, of 1.6 percent.

Also, in the 25 markets where it first rolled out service, it reported it has an estimated average household penetration rate of 10.4 percent.

"We are building a network today that is doing for the Internet what cellular networks did for voice communications," said Clearwire's Chief Executive Ben Wolff in a prepared statement.

"The solid financial results and strong subscriber acquisitions we demonstrated this quarter speak volumes about the mass-market appeal of our differentiated broadband offering," Wolff said.

Clearwire received favorable attention ahead of its initial public offering (IPO) and sold shares at $25 apiece to raise $600 million. But since then, it has had a hard time maintaining that stock price.

Analysts started to fear the money-losing company will need billions more to complete the network.

The stock hit a recent low of $16.44 before rising on the news Clearwire grew its subscriber base 25 percent during the first three months of the year.

Tuesday, the stock rose 40 cents to close at $19. During after-hours trading, the stock fell 72 cents to $18.28. Results were released after extended trading concluded.

The company is one of two carriers in the U.S. attempting to roll out what will eventually be a WiMax wireless network.

Sprint Nextel has also pledged billions of dollars to build a network.

Clearwire gained a head start, having built out about 38 U.S. markets based on a proprietary version of the technology, now owned by Motorola.

Tricia Duryee: 206-464-3283 or tduryee@seattletimes.com

Clearwire's results
Dollar figures in thousands, except per share; parentheses denote losses.
March 31 %
1st QTR 2007 2006 CHG
Profit $(92,635) $(55,279) -67.6
Per share (0.64) (0.73) +12.3
Revenue 29,275 22,748 +28.7

Copyright © 2007 The Seattle Times Company

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