Aspiring wireless broadband provider Clearwire
On the financial front, Clearwire's revenue leapt 76% from a year ago, to $51.5 million, as it picked up 48,000 net new subscribers this quarter. The cost of providing service soared 128%, however, dragging gross margins down to 26% of revenue. To help improve cash return on investments, Clearwire avoided launching any new markets this quarter, focusing instead on scaling up current markets to improve margins
As promised, the company reined in expenses and slowed development of new markets, evidenced by a mere 44% increase in selling, general and administrative expenses. Greater spectrum lease expenses and debt service nearly doubled the bottom-line losses, though, as the company reported a net loss of $176.4 million.
Just as with Sprint Nextel
Like a resurging racer that moves up to challenge the lone leader, the addition of cable players and the infusion of cash and spectrum into the new, proposed Clearwire make the industry's race toward the next generation of wireless services interesting again. With traditional telecom providers AT&T
The next few quarters will be consumed by the transition to the new company, one in which current Clearwire shareholders will only have a minor, 27% stake. But the addition of cash, spectrum and other assets will be a tremendous boost to the spread of WiMAX-based services. If the deal gets finished, investors will have a more viable contender in the space.
Call up more Foolishness:
More from The Motley Fool
Sprint Acquires Clearwire After Stockholders Approve Merger
Sprint's merger with Clearwire passed its final test with Clearwire's minority stockholders voting to approve the transaction.
FCC OKs Sprint and Clearwire Deals
The wireless providers gain regulatory approval for both acquisitions.
Always a Bridesmaid, Never the Bride: Where Will DISH Turn Now?
DISH Network gave up on two high-stakes wireless options, leaving both to be gobbled up by a Japanese network. Where will Dish set its wireless sights next?