As soon as WiMAX upstart clwr announced its new funding package this week, you could hear the mumbling. Google didn't pitch in! Google must not believe in the company any more. Now, I can't speak for Google directly, but the market consistently misunderstands the companies intentions. Google didn't invest in Clearwire in order to take over telecom, or even to make a start at it. They did it because it's worth far more to them to have another last mile alternative in the system than it costs them to help get one started. If they're not needed to keep it going, then they will leave it alone. I doubt Google will invest more unless there is a real danger they won't get their last mile alternative out of it.
As usual, little else about Clearwire's financial results mattered except their capital expenditures, current cash balance, and plans for new capital. Overall, the market was not terribly pleased with the report, but honestly that's par for the course - it always takes longer than people hope it will. Clearwire clearly has the money to keep building out for some time. The key now is subscriber growth, and we at least began to see it this quarter with net additions of 44,000. More importantly, the company sees that rate accelerating, and net additions in the fourth quarter will likely be more than in the past three quarters combined. But of course, these numbers are still small and they will need to maintain that acceleration for quite a while in order to achieve scale.
Is anybody out there using Clearwire's WiMAX? How does it measure up so far?
If you haven't already, please take our Reader Survey! Just 3 questions to help us better understand who is reading Telecom Ramblings so we can serve you better!Categories: Financials · Wireless