Clearwire (CLWR) said it accumulated a company record $362 million in revenues during the fourth quarter of last year, which was more than double the amount posted during the final three months of 2010 and slightly ahead of analyst estimates.
The company noted that revenues generated through Clearwire-branded services accounted for $198 million in revenues (a 1% sequential increase) while its wholesale business accounted for the remaining $164 million (or a 20% sequential increase).
For the quarter, Clearwire said it added 900,000 wholesale subscribers to its network, which was down significantly from the 1.42 milliom wholesale customers added during the fourth quarter of 2010. A majority of Clearwire’s wholesale customers are Sprint Nextel customers signing up for service using a device compatible with Clearwire’s WiMAX network. Clearwire recently announced plans to stop expanding that network beyond its current reach of 129 million potential customers in favor of deploying TD-LTE technology.
On the direct side, Clearwire lost approximately 200,000 customers signed up to Clearwire-branded services during the quarter, ending the year with 1.3 million total direct customers. The carrier ended the year with 10.4 million customers on its network.
Wholesale customer churn increased significantly year-over-year during the fourth quarter, increasing from 1.4% in 2010 to 2.9% in 2011. Retail churn increased slightly from 3.8% to 3.9% year-over-year. Wells Fargo Securities Senior Analyst Jennifer Fritzsche attributed the increased wholesale churn to a number of Sprint Nextel customers switching to Apple’s iPhone during the fourth quarter, a device that is not compatible with Clearwire’s WiMAX network.
Clearwire added that overall network usage surged 165% in 2011, with fourth quarter wholesale usage increasing 22% that it attributed to growing smartphone usage. That growth, along with its year-over-year increase in its customer base and reduced operating costs are expected to boost Clearwire’s Q4 adjusted earnings before interest, taxes, depreciation and amortization 140% sequentially, from a loss in Q3 to a gain in Q4.
Investors seemed buoyed by the news, sending the carrier’s stock up more than 2% in early Tuesday trading.
Clearwire is expected to report full Q4 and full-year 2011 results in the coming weeks.
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