Clearwire released its fourth quarter and full year 2011 results in a conference call with investors, analysts, and the media this afternoon. S4GRU was on the call to bring you this report.
Clearwire highlighted its 8-K report with the following statistics:
- Record Fourth Quarter 2011 Revenue of $361.9 Million, Up 107% Year Over Year From $175.2 Million
- Full Year Revenues of $1.25 Billion, Up 134% Year Over Year From $535.1 Million
- Full Year Wholesale Revenues Up 876% Year Over Year to $493.7 million
- 2011 Total Ending Subscribers of 10.4 Million, Up 140% Year Over Year from 4.3 Million
- Achieves Positive Quarterly Adjusted EBITDA For the First Time of $22.5 Million
- Average Smartphone 4G Usage Increased 88% Year Over Year in Fourth Quarter 2011
Much of the rest of the report is focused on business metrics that may not be of particular use to anyone without an investment in Clearwire. But we did pore over the report to glean the following numbers of interest to S4GRU readers:
- BRS 2500-2600 MHz licensed spectrum valuation remained steady at $4.3 billion
- EBS 2500-2600 MHz spectrum lease costs totaled $309 million for 2011
- WiMAX covered POPs increased year over year from 112 million to 132 million but plateaued at that level by the end of the second quarter
- Wholesale (e.g. Sprint) churn almost doubled from 1.5 percent to 2.9 percent during the fourth quarter
To provide some analysis of the four points above, first and second, Clearwire holds an average of ~160 MHz of BRS/EBS spectrum bandwidth in the top 100 markets. However, as noted above, some of this spectrum (EBS) is leased from educational institutions, not licensed directly to Clearwire. Additionally, higher frequency spectrum is generally less valuable than is lower frequency spectrum. Otherwise, Clearwire's ~160 MHz of spectrum would be valued in the tens of billions of dollars.
Third, as Robert has detailed in a forum post about "protection sites," Clearwire faced a May 1, 2011 FCC deadline to demonstrate at least minimum coverage in numerous Basic Trading Areas (BTA) across the country. As a result, Clearwire lit up numerous license "protection sites" around the country during the first few months of last year, leading to the 20 million POPs increase that then stalled for the remainder of the year, as Clearwire made the decision to cease WiMAX deployment and switch to LTE.
Fourth, Sprint is Clearwire's largest wholesale partner. Any Sprint retail subscriber who has a WiMAX capable device is technically also counted as a Clearwire wholesale subscriber. While Clearwire churn remained relatively flat through the first three quarters, it spiked in the fourth quarter. Clearwire attributed the increase in wholesale churn in large part to Sprint offering the iPhone 4S, which is not WiMAX capable.
Lastly, Clearwire addressed some of its plans for its TD-LTE 2500-2600 overlay. Clearwire reiterated its commitment to the TDD "ecosystem," alongside strategic partners China Mobile, et al., and to TDD/FDD interoperability that will allow for seamless roaming on both types of LTE networks. Clearwire expects to start build out on its LTE Advanced ready TD-LTE overlay in the second quarter, spending $400 million this year and $200 million next year, keeping costs low because much of the WiMAX infrastructure can be reused for TD-LTE. Build out goals in phase one include 8000 TD-LTE sites, at least 5000 of which are to be live by June 2013. In the WiMAX build out, Clearwire selected its own independent site locations, and this led to great inconsistencies between Clearwire and Sprint coverage. But in the TD-LTE build out, Clearwire and Sprint will work together to identify sites within the Sprint portfolio that exhibit the "highest 4G data usage potential" with fallback to the Sprint FDD LTE 800/1900 network outside of those Clearwire data "hotspots." Finally, both Clearwire and Sprint project multi-band, multi-mode TDD/FDD LTE devices that can utilize the Clearwire TD-LTE overlay to be available by June 2013, by the same time that the first 5000 sites should be online.