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Clearwire Corporation (CLWR)

Q3 2010 Earnings Call

November 4, 2010 4:30 PM ET


Paul Blalock – Vice President, IR

Bill Morrow – Chief Executive Officer

Erik Prusch – Chief Financial Officer

Mike Sievert – Chief Commercial Officer

John Saw – Chief Technology Officer


Sheng Yung – Citadel Securities

Rick Prentiss – Raymond James

Michael Nelson – Mizuho Securities

Simon Flannery – Morgan Stanley

Jonathan Chaplin – Credit Suisse

Walter Piecyk – BTIG

Sid Parakh – McAdams Wright Ragen

Kevin Roe – Roe Equity Research

Kevin Coyne – Goldman Sachs



Good day, ladies and gentlemen. And welcome to the Q3 2010 Clearwire Corporation Earnings Conference Call. My name is Keith, and I’ll be your Operator for today. At this time, all participants are in listen-only mode. Later, we will conduct a question-and-answer session. (Operator Instructions)

As a reminder, this conference is being recorded for replay purposes. I would now like to turn the conference over to your host for today, Mr. Paul Blalock, Vice President, Investor Relations. Please proceed, sir.

Paul Blalock

Thank you, Keith. Good afternoon. And welcome to Clearwire’s third quarter 2010 financial results conference call. With me today are Bill Morrow, Chief Executive Officer; and Erik Prusch, Chief Financial Officer, who will both discuss Clearwire’s third quarter results.

As a reminder to all listeners, today’s call is being webcast on the Clearwire Investor Relations website and will be archived on that site and available for replay shortly after we conclude. Hopefully, you’ve all had an opportunity to read the release issued a few minutes ago, which provides detailed financial information regarding Clearwire’s third quarter results.

Today’s call may contain forward-looking statements reflecting management’s beliefs and assumptions concerning future events and trends in or expectations regarding financial results. Forward-looking statements include among other things, our future financial and operating performance and financial conditions, including projections and targets for 2010 and subsequent periods, subscriber growth, network development and market launch plans, strategic plans and objectives and the need for additional financing. These forward-looking statements are all based on currently available operating, financial and competitive information and are subject to various risks and uncertainties.

Listeners are cautioned not to put undue reliance on any forward-looking statements, as they are not a guarantee of future performance. Please refer to our press release and our filings with the SEC for more information concerning risk factors that could cause actual results to differ materially from those in the forward-looking statements. The company assumes no obligation to update any of these forward-looking statements.

And lastly, a reconciliation of any non-GAAP financial measures discussed today on this call can be found in our press release.

I will now turn the call over to Bill Morrow.

Bill Morrow

(Inaudible) everyone and thank you for your continued interest in our company. Record this quarter results once again demonstrate that consumer demand for mobile broadband is unprecedented and as yet, unmatched by any other U.S. carrier, and while Clearwire certainly faces a couple of near-term hurdles, which we’ll discuss with you on this call, we’re excited about the opportunities ahead for our industry but especially for Clearwire.

Today we are delivering a 4G service with speeds that far exceed traditional 3G services at a better price with a substantial range of commercially available devices through a powerful set of distribution channels and most importantly, with the necessary spectrum capacity to serve this amazing growth curve.

We know that you’re interested in our network build progress and it’s with pleasure that I report that as of today our sites on air have enabled our subscribers the ability to use our domestic 4G network across 100 million POPS. Our network continues to be the largest 4G deployment in the United States, with the most subscribers and the most POPS covered of any network so far.

Since the second quarter, we have expanded our domestic retail launched area by 47%. The new cities include Boston, Daytona Beach, Providence, Nashville, Orlando, Minneapolis, St. Paul and Pittsburgh. And earlier this week, we are very proud to have launched the first 4G service in New York City, our largest deployment ever.

Delivering 4G service in major markets is no small undertaking and it is a testament to our ability to execute, of course, anyone in the wireless industry knows you are never truly done building coverage, but at launch our New York network covers nearly 12 million people. Regionally, service covers six counties in north New Jersey from Middlesex to Bergen County and the five Boroughs of New York City.

Our entire management team remains laser focused on our ambitious goal of expanding our network to reach up to 120 million people by the end of the year.

This larger 4G footprint and the success of 4G handsets has led to a quarter ending record customer base of 2.84 million, which represents more than a 400% gain from the 566,000 subscriber base in the third quarter of last year.

Breaking this down somewhat, we saw our retail base grow by 150,000 to 1 million and our wholesale base grew by 1.1 million to 1.83 million. It is important to note that this marks the first time that our wholesale subscriber base has eclipsed that of our retail group. Due to this phenomenal growth, we are once again updating our subscriber guidance as we now believe we will end this year in excess of 4 million total subscribers, nearly doubling our original 2010 guidance of just over 2 million.

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