From: DOW JONES NEWSWIRES
Original Article: By Roger Cheng
Date: MAY 13, 2009
NEW YORK (Dow Jones)–Clearwire Corp. (CLWR) signed another high-profile partner in Cisco Systems Inc. (CSCO) as it races to roll out its next-generation wireless network.
In addition, the Kirkland, Wash., company posted a slightly narrower first-quarter loss on higher sales, although subscriber growth slowed, and reshuffled its management team.
Clearwire tapped Cisco to provide the network backbone to its fourth-generation WiMax service. The San Jose networking titan will eventually build mobile connection devices for the network, which Clearwire is slowly rolling out.
The San Jose networking titan joins forces with a few other Silicon Valley giants, including Intel Corp. (INTC) and Google Inc. (GOOG), in backing a technology that rivals a standard most carriers have chosen as their own 4G network. Unlike the other technology giants, Cisco isn’t investing in Clearwire. Financial terms weren’t disclosed.
While a positive thing, questions about Clearwire’s business remains.
“Although we view the announcement as positive for Clearwire’s ability to broaden its WiMax ecosystem partners, we continue to have significant concerns regarding its business model and cash burn in the face of a weak macro environment,” said Soleil Securities analyst Michael Nelson.
Clearwire posted a loss of $71.1 million, or 38 cents a share, compared with a loss of $76.4 million, or 41 cents, from a year ago. Sales rose 21% to $62.1 million.
Analysts expected a loss of 30 cents a share and sales of $63 million.
The company added 25,000 net new subscribers, compared with 48,000 from a year ago.
Clearwire also made some changes to its executive team. Barry West, who was the company’s president and chief architect, will instead oversee the international assets.
It also tapped three executives in a reshuffling of its management following the appointment of William Morrow as CEO in March. G. Michael Sievert will join as chief commercial officer, Kevin Hart will serve as chief information officer, and Laurent Bentitou will serve as chief people officer.
On the Cisco partnership, the networking company’s gear will go into the physical link between the radio antennas and the core central office. Much of wireless traffic congestion can be found on the older ground network, known in industry lingo as backhaul.
“It’s very strategic,” Clearwire Chief Strategy Officer Scott Richardson told Dow Jones Newswires on Wednesday.
Traditionally, telecom equipment comes from players such as L.M. Ericsson Telephone Co. (ERIC) or Alcatel Lucent (ALU). But the adoption of Internet protocols in 4G networks allows Cisco a chance to enter the business.
“Quite frankly, radio technologies between LTE and WiMax are similar,” Richardson said. “The focus should be more on the underlying IP network, and bandwidth needed to deliver next-generation services.”
Cisco executive Suraj Shetty was quick to point out that its IP network gear would work for both WiMax and LTE, which is what many of the U.S. carriers will be moving towards over the next few years.
For now, Richardson touts the time advantage Clearwire has with WiMax.
Clearwire said it would cover 120 million people in more than 80 markets by the end of 2010, although those plans were at the lower end of a previously provided range. Verizon Wireless, which is jointly owned by Verizon Communications Inc. (VZ) and Vodafone Group Plc (VOD), plans to begin deployment of its LTE network next year.
Cisco also plans to build WiMax devices likely to look like access devices similar to its Linksys routers and modems. The partnership with help Clearwire go after small businesses and enterprise customers, Richardson said.
“Clearwire is going to look to Cisco and its R&D muscle to provide leading edge features,” he said.
admin 4G 4G, Clearwire, WiMax