Clearwire reports loss, cuts staff by 15% and delays rollouts

By on November 5, 2010, 8:30 AM
Clearwire has announced that it will undertake various cost-cutting measures after reporting a loss of $139 million for the third quarter of 2010. To conserve cash, the company will reduce marketing spending, delay the launch of certain products and services, and suspend development at select construction sites.

Additionally, it will dismiss a substantial number of contractors as well as 15% (about 630) of its ~4,200 employees. Clearwire believes those changes could yield a savings of between $100 and $200 million.

The 4G provider is also looking for ways to secure additional capital, including "strategic transactions" and "additional debt or equity financings and/or asset sales." Despite its loss, Clearwire reported plenty of positive results for the recent period and it remains "cautiously optimistic."

Revenue increased 114% year-over-year to $147 million as the company witnessed strong demand for its mobile broadband service, adding 1.23 million subscribers for a total of 2.84 million, up 402% on-year. Its 4G network now reaches 100 million people and by the end of 2010 it plans to cover 120 million people and have more than 4 million subscribers.




User Comments: 16

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danielcor said:

ClearWire -- Sprint's partner to provide WiMax.

This wills substantially affect Sprint's ability to grow their network...

Ranger12 Ranger12 said:

Yeah it took me a sec before i realized what company it was. Ive always seen it called just "Clear". Anyway, its a great service but seeing as I dont use a laptop anywhere I dont really have a need for it. My connection at home is plenty.

mikeusru said:

I just can't imagine their service being all that useful right now - there are still too few 4g phones, and cities that have clearwire coverage already have cheaper and faster internet connection options. Not that many people actually want to take their laptop to the park to browse the internet - and as far as I can see, that's the only real appeal of this service. Oh, and you can already do that by just hooking up to your cellphone. Sorry, Clearwire. Maybe if you set up in rural areas where there is no good coverage and crap connections - maybe then?

taea00 said:

I'm surprised if they're growing at such a massive rate why the decline? Because once again people don't know how to add and subtract properly. Red is not a good thing, so because we screwed up now the little guy as to pay and have his job cut. Bravo corporate America!

TomSEA TomSEA, TechSpot Chancellor, said:

ClearWire requires a 2 year contract with some ridiculous fee if you try and cancel before the two years is up. I know more than one person who were initially interested in their services, but chose otherwise once they started reading the fine print in their contract.

Maybe if they were a little more customer friendly, they'd have more success.

Ranger12 Ranger12 said:

taea00 said:

I'm surprised if they're growing at such a massive rate why the decline? Because once again people don't know how to add and subtract properly. Red is not a good thing, so because we screwed up now the little guy as to pay and have his job cut. Bravo corporate America!

Except they directly created 6000 jobs not to mention all the jobs that were indirectly created. Business is a lot more than "add and subtract". There is a lot of risk involved even with the best business plans. Cutting those jobs was the responsible thing to do.

Ranger12 Ranger12 said:

*4200 jobs, not 6000.* My b

hassaan said:

"The Company is actively pursuing a number of options to resolve its need for additional capital. The Company is in discussions with a number of its major shareholders and other third parties about a number of options, including potential strategic transactions, additional debt or equity financings and/or asset sales. While the Company is cautiously optimistic it will resolve its short-term funding needs in the near future, there can be no assurances. Thus, it is implementing a series of significant cash conservation measures to reduce costs, including: a substantial reduction in sales and marketing spending, a suspension of additional retail channel market launches of the CLEAR-branded operations in select markets including Denver and Miami, delays in the introduction of CLEAR-branded smartphones, a substantial reduction in the contractor workforce, a 15% reduction in the number of employees, and the discontinuation of development activities for sites not required for its current build plan. The Company currently has thousands of sites in various stages of planning and construction beyond its current build plan, and it intends to suspend zoning and permitting in a portion of those sites until such time as additional funding becomes available."

Jibberish18 said:

For one, their speeds weren't nearly as fast as people hoped for or even as Clearwire stated they would be. I'm sure or guessing they've improved this situation since it's months later. Right? Right. Now lets think about slow ping times. They're mobile towers. They're never going to be Wired LAN to your home. Right? Right. Now these issues alone might've kept lots of people away. Otherwise, a mobile broadband that you can "take with you" is pretty cool. THEN they gave their services to Sprint, an investor, and Sprint charges $10 a month for it, if I'm correct, when your speeds are just a bit over what you get with 3G. GSM companies are offering speeds WAY faster than WiMax and for no extra cost.

In the end, WiMax tried to jump the gun and be first to gain traction, which they did, just not enough it seems like. You can think of a hundred scenarios in the past where being first wasn't always the best thing.

Jibberish18 said:

Here's some tests done to WiMax in Chicago.

[link]

sMILEY4ever said:

flocka said:

clearwho?

+1. They're not so reknown..

otester said:

Maybe WiMax just sucks (explaining poor speed)?

Should have gone with LTE?

tonylukac said:

You can get a clear modem/router and connect it to a wired network in your house. Their rates are competitive for those who don't stream, $30 a month being the lowest. However, it you go over about 8 gig download cap for the month, they throttle you to dialup speeds (56K) for the rest of the month.

capkingy said:

You can also get the clear ispot travel router for apple devices that is a no contract option and is 25 dollars a month for unlimited 4g service. I got the rover puck because you can use it with any device. I plan on getting the ispot for the cheaper 25 a month fee.

otester said:

tonylukac said:

You can get a clear modem/router and connect it to a wired network in your house. Their rates are competitive for those who don't stream, $30 a month being the lowest. However, it you go over about 8 gig download cap for the month, they throttle you to dialup speeds (56K) for the rest of the month.

I thought Clears' 4G is unlimited, or is this some type of fair usage policy (8GB)?

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