Clearwire announces cuts as losses deepen

If US WiMAX outfit Clearwire, in many ways the poster child of the WiMAX industry, has announced a raft of cost saving measures on the back of disappointing financial results. The firm published its Q3 results this week, with losses for the quarter hitting $139.4m, compared to $82.4m for the same period in 2009. More worrying, the firm conceded that it has yet to sort out funding for its future evolution, hence the cutbacks

Clearwire will be making a “substantial reduction” in sales and marketing spend, and suspending the launch of branded retail outlets. The arrival of its branded smartphones has also been delayed, and 15 per cent of the company workforce is getting the boot. On the network side, Clearwire said it is discontinuing “development activities for sites not required for its current build plan.”

None of this is going to help the WiMAX player when its cellular competitors ratchet up their LTE deployments. In August Clearwire said it would be launching its own LTE trials, which it has now confirmed will be concluded in the first quarter of 2011, which is hardly a ringing endorsement of its core technology. In a bid to dilute the bad news, Clearwire pointed out that it added 1.23 million subs in the third quarter, taking its total to 2.84 million, and it predicted it would break the four million barrier by the end of the year, which is double its own original expectation.

“We continue to pursue all options for future funding including debt, equity or a potential sale of excess spectrum or other assets, and we remain cautiously optimistic that we will resolve our short-term funding needs in the near future,” said CEO Bill Morrow. “We continue to believe that our unmatched spectrum portfolio and our all-IP based network will keep us extremely well positioned in the dynamic and burgeoning market for mobile data,” he added.