Today, Clearwire reported its consolidated financial and operating results for the fourth quarter and full year of 2009.
“Over the past year, Clearwire established its leadership in 4G mobile broadband services by building the largest 4G network in North America, raising additional financial to fuel our growth, supporting the 4G wholesale service launched for three of the most prominent communications companies in the U.S., and delivering solid financial results in a challenging economic environment,” said Bill Morrow, CEO of Clearwire.
In the upcoming year, Clearwire expects to cover up to 120 million people with its 4G network, with services offered under the CLEAR brand name along with that of the company’s wholesale providers. Rollout is expected in top markets including New York, Boston, Washington D.C., Houston, San Francisco, Denver, Minneapolis, and Kansas City.
The Company expects retail cost-per-gross add (CPGA) to remain consistent with 2009 levels and retail average-revenue-per-user (ARPU) to remain flat. Clearwire anticipates 4G subscriber levels to triple and expects to have full year 2010 net cash spending between $2.8 billion and $3.2 billion. Clearwire’s ability to manage the developing market, performance in launched markets, and access to funding will all affect future plans.
Consolidated revenue increased by 34% to $79.9 million in the fourth quarter of 2009, compared to pro forma revenue of $59.7 million for the fourth quarter of 2008. Growth in revenue was driven mainly by Clearwire’s larger subscriber base, including the addition of ten new markets.
Total subscribers increased to roughly 688,000 at the close of the fourth quarter of 2009, an increase from approximately 475,000 on a pro forma basis at the end of the fourth quarter of 2008. Clearwire added about 87,000 net new retail subscribers during the fourth quarter of 2009 which was greater than the first three quarters combined. This increase included the addition of approximately 90,000 net new retail subscribers in the company’s 27 4G markets, which were partially offset by a modest net decline in subscribers in domestic and international legacy markets for the quarter.
Retail ARPU for the fourth quarter of 2009 was $39.86, an increase of $0.16 from the pro forma retail ARPU level in the fourth quarter of 2008 and a sequential quarter increase of $0.15 compared to $39.71 reported in the third quarter of 2009. An increase in bundled sales and mobile offerings that was offset by an increase in promotional activity due to the large number of new customers was the main cause of the retail ARPU increase.
The cost of goods and services and network costs for the fourth quarter of 2009 increased 119 % to $169.8 million compared to pro forma costs of goods and services and network costs of $77.4 million in the fourth quarter of 2008. This increase was the result of increased tower rents as the company expands its 4G network, an increase in equipment sales to customers, and roughly $41 million related to write offs of customer premise equipment and network/base station equipment.
Higher network expansion activities led to an increase in Capital Expenditures (CapEx) to $767 million in the fourth quarter of 2009 from pro forma CapEx of $83 million in the fourth quarter of 2008. Approximately $200 million of the 2010 network build costs were accelerated and pulled into 2009 CapEx spending. Cash spent on operations and CapEx was $823 million for the last quarter of 2009, and $1.97 billion for the year. This was offset by a net increase of roughly $2.7 billion in net capital raising in the fourth quarter of 2009. Clearwire ended December 2009 with cash and short-term investments of approximately $3.8 billion invested primarily in U.S. Treasury securities.
