In the first quarter, Clearwire added nearly 1.8M net subscribers, of whom 1.6M were of the wholesale variety. That's more than the 1.5M added in Q4 and brought their total to approximately 6.15M subscribers, and they now forecast ending 2011 with approximately 9.5M subscribers. That would correspond to adding just over 1.1M each quarter from here, which suggests additional upside if they continue anywhere near their Q1 pace.
So how much are 6M subscribers worth? Well, thus far it has boosted quarterly revenues up to $258.1M - if one includes the $16.1M Q1 payment from Sprint that was actually agreed to after the quarter ended. Whether you do or not, the number was ahead of analyst projections of about $237M. While the Q1 performance pushes them past the $1B mark in terms of annual run-rate, their costs still run 2-3 times that and therefore they have a lot of ground to make up still both through improved cost structure and revenue growth.
The wholesale agreement with Sprint will help hold things together financially for Clearwire for at least another year or so, during which they will obviously be racing toward whatever sustainable future may lie ahead. One wonders just how many subscribers means break-even and how long it will take to get there. Would 2M retail and 15M wholesale do it? I guess it depends on what the costs look like at such levels.
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