Q2 2011 Earnings Call
August 03, 2011 4:15 pm ET
Erik Prusch - Chief Operating Officer
Alice Ryder -
John Saw - Chief Technology Officer and Senior Vice President
Hope Cochran - Chief Financial Officer
John Stanton - Chairman, Interim Chief Executive Officer and Member of Strategic Committee
John Hodulik - UBS Investment Bank
Philip Cusick - JP Morgan Chase & Co
Walter Piecyk - BTIG, LLC
Michael Funk - BofA Merrill Lynch
Jonathan Chaplin - Crédit Suisse AG
Richard Prentiss - Raymond James & Associates, Inc.
Michael Rollins - Citigroup Inc
Previous Statements by CLWR
» Clearwire's CEO Discusses Q1 2011 Results - Earnings Call Transcript
» Clearwire's CEO Discusses Q4 2010 Results - Earnings Call Transcript
» Clearwire CEO Discusses Q3 2010 Results - Earnings Call Transcript
Thank you, Mary. Good afternoon, and welcome to Clearwire's Second Quarter 2011 Financial Results Conference Call. With me today are John Stanton, our Chairman and interim CEO; Erik Prusch, Clearwire's Chief Operating Officer; and Hope Cochran, our Chief Financial Officer. John Saw, our Chief Technology Officer is also available for the question-and-answer session.
Today's call is being webcast live on the Clearwire Investor Relations website and will be archived on that site and available for replay shortly after we conclude. A reconciliation of pro forma financial information and any non-GAAP financial measures discussed in this call can also be found in our press release. In particular, we have pro forma income statements, including pro forma wholesale revenue and pro forma wholesale ARPU and pro forma net loss, which adjust for the timing of certain payments with Sprint in conjunction with the wholesale pricing agreement we signed and a related settlement payment we received during the second quarter.
In addition, today's call may contain forward-looking statements reflecting management's beliefs and assumptions concerning future events and trends and expectations regarding financial results. Forward-looking statements include, among other things, our future financial and operating performance and financial condition, including projections and targets for 2011 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. Unless otherwise specified, forward-looking statements made on this call excludes the impact of the company's recently announced plan to add LTE technology on its network. 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.
Additionally, all mentions of EBITDA on this call reference adjusted EBITDA as defined in our press release. Beginning in the second quarter, we have also updated our definition of adjusted EBITDA to exclude non-cash write-downs, which reflects the measurement our management uses to evaluate our operating performance. We believe this definition is also consistent with how investors and others evaluate our performance.
In addition, we are currently pursuing a sale of most of our international operations and as a result, starting in the second quarter, we are reporting these portions of our international operations as discontinued operations in our financial statement. The financial statements and metrics from continuing operations primarily reflect the domestic business and for comparative purposes, prior period figures have been adjusted to reflect this change.
I will now turn the call over to John Stanton.
Thank you, Alice, and thanks for joining us today. Our team is focused on achieving profitability. We have 4 simple goals. First, drive wholesale revenue growth, particularly with Sprint and our cable partners. Second, optimize the retail channel for cash generation. Third, cut costs; and fourth, develop and implement a long-term technology and funding plan.
On this call, Erik will describe our operating strategies, including our plans to grow revenue and cut costs and provide details of our network evolution plans. Hope will review the financial results, that specifically demonstrate our substantial progress towards achieving our goals.
For the last few months, we've been diligently working on the next strategic phase for Clearwire, which we would like to share with you today. Based on the success and insights from our now completed Phoenix trial, we plan to add LTE services to our present network in areas with high usage concentration where we can meet the needs of our current partners and other major carriers. Our carrier customers would use LTE capacity to supplement their offerings.
LTE will be implemented by overlaying most of our existing 4G network. We will not use Sprint's project vision in our existing markets because it is substantially more expensive compared to the cost of overlaying our own network. We are in discussions with Sprint about using vision in new build markets in the future.
We plan to maintain the WiMAX network for a significant period of time to serve our present customers. We believe WiMAX will continue to represent an appealing product for certain market segments.
There are 2 key reasons we can implement this strategy, our spectrum and our network. We have the largest, deepest spectrum position in the industry on the best and only globally coordinated band, differentiating ourselves from any other carrier or want-to-be 4G operator.
With an average of 160 megahertz of spectrum nationwide, we have more spectrum than even AT&T and T-Mobile combined. With all of our spectrum in one contiguous band, our spectrum depth enables us to deploy wider channels or fatter pipes to enhance the throughput speed and capacity.