Next-generation wireless network provider Clearwire
Clearwire added 12,000 net new customers this quarter for a grand total of 511,000 accounts, an 11% annual improvement. The company is building out long-range WiMAX broadband services as fast as it can, but the new WiMAX subscribers can in many cases simply upgrade from older and slower Clearwire services rather than converting from traditional wireless carriers like AT&T
The company is using funding from technology heavyweights like Google
Converting a large coverage area into actual customers will take a serious marketing blitz. It's not enough simply to build out great technology services and hope for the best. Verizon's FiOS service, which brings TV and Internet services to customers over ultra-fast fiber-optic networks, currently reaches 13.8 million households -- but only has 2.5 million subscribers. And that's with a heavy, heavy marketing push over the last couple of years.
In other words, you should expect Clearwire to grow, but it'll be slow going at first. WiMAX is currently only good for piping Internet traffic to your laptop or netbook. Once handset makers like Motorola
This stock has more than doubled over the last six months, even after today's 15% haircut. Clearwire is not profitable, and won't be for years. There's no telling how Mr. Market will treat this puppy until we've seen the WiMAX service gain some traction. Until then, I believe your portfolio would be better off with a traditional telecom stock like Verizon or AT&T. But I’d love to hear what the Foolish community thinks as well. Which wireless stock would you buy today? Let us know in the comments!
Fool contributor Anders Bylund owns shares in Google, but he holds no other position in any of the companies discussed here. You can check out Anders' holdings or a concise bio if you like, and The Motley Fool is investors writing for investors.