Clearwire reports loss as it expands

Clearwire, the Kirkland mobile-services provider building out a high-speed WiMax network, posted a second-quarter loss as it spent more to expand its network ahead of rival technologies.

The loss of $73.4 million, or 38 cents a share, compared with a loss of $74.6 million, or 40 cents, a year earlier, Clearwire said Tuesday. Sales rose 8.6 percent to $63.6 million.

Clearwire plans to cover 120 million people by the end of 2010 from about 23 million now. It's working to boost WiMax's reach before larger rivals Verizon Communications and AT&T roll out a fourth-generation technology known as long-term evolution.

Clearwire needs more funding to complete the build out on time, CEO Bill Morrow said.

"The company is doing a balancing act with the desire of rolling out new markets as quickly as possible, but still preserving enough capital so that they don't run out of cash," said Michael Nelson, an analyst at Soleil/Nelson Alpha Research in New York.

Clearwire stock fell 58 cents, or 6.9 percent, to $7.85 in after-hours trading after rising 20 cents to $8.43 in regular trading Tuesday on the Nasdaq Stock Market. The stock has gained 71 percent this year.

Morrow will have to decide whether to slow down the expansion. While the company needs at least $2 billion to fund the construction and become cash-flow positive, Morrow said he's "quite comfortable" with Clearwire's ability to secure the financing.

He said he'll be able to keep up with rival mobile Internet services because of the familiar brand names of Clearwire's partners, including Comcast and Time Warner Cable. The company will also have a voice-over-Internet-protocol product sometime next year that will let customers use services like Skype to bypass mobile carriers when making calls.

The second-quarter loss narrowed partly because the company lowered sales and administrative costs by 7.2 percent to $113.2 million. Clearwire's year-earlier loss included results from Sprint Nextel's WiMax assets.

Clearwire added 12,000 customers as it expanded into Atlanta and partners began selling the company's WiMax service under their own brand names. Jonathan Atkin, an analyst at RBC Capital Markets in San Francisco, expected a gain of 15,000.

Sprint, which owns 51 percent of Clearwire, plans to sell WiMax service to customers in Atlanta, Portland and Las Vegas this month. It said Tuesday that it would add 17 more cities to its 2009 lineup — including Bellingham, Boise, Idaho, and Salem, Ore. — for a total of 25.

Comcast, the largest U.S. cable-television provider, began offering customers high-speed wireless Internet access outside of their homes on the Clearwire network in June.

Clearwire plans to move into Seattle, Chicago, Charlotte, N.C., Honolulu, Philadelphia and Dallas this year, and New York, Washington, D.C., Houston and San Francisco in 2010.

Founded by mobile-phone pioneer Craig McCaw, Clearwire received $3.2 billion from backers including Google and Intel and wrapped in Sprint's WiMax unit in December.

The company hasn't announced any plans for securing new funding so far, and Morrow said on a conference call that it may slow construction if cash runs low. He declined to give details on financing options.

Separately Tuesday, Clearwire said it is adding Huawei — a Chinese company that is edging into the U.S. market for telecommunications gear — to its list of suppliers for the buildout of its network.