Clearwire 2007 Annual Report Download - page 11

•Reliable. We use licensed radio frequencies, or spectrum, which enables us to minimize interference
common on certain wireless networks that use unlicensed or shared radio frequencies.
•Affordable. We offer a value proposition that is competitive while recognizing the unique benefits of our
service offerings.
We were founded by telecommunications pioneer Craig O. McCaw, our Chairman, in October 2003, and we
launched our first market in August 2004. By December 31, 2007, we offered our services to more than 16.3 million
people in the United States and Europe. As of December 31, 2007, our network in the United States is deployed in
46 markets and covers an estimated 13.6 million people. Our markets range from major metropolitan areas to small,
rural communities, and all sizes in between. As of December 31, 2007, we also offered our wireless broadband
services in Ghent and Brussels, Belgium, Dublin, Ireland and Seville, Spain, where our network covers approx-
imately 2.7 million people.
We conduct our operations through our domestic and international subsidiaries. For information regarding the
geographic distribution of our total revenues and total long-lived assets, see Note 16, Business Segments, of our
consolidated financial statements. Our operations in the United States are primarily conducted through our
subsidiary, Clearwire U.S. LLC, and our spectrum leases and licenses in the United States are primarily held
by separate holding companies. Internationally, our operations are conducted through Clearwire International,
LLC, our wholly-owned subsidiary, which indirectly holds investments in Europe and Mexico.
Subscribers have rapidly adopted our services as we have grown from approximately 62,000 wireless
broadband Internet subscribers as of December 31, 2005 to approximately 394,000 as of December 31, 2007.
We believe that substantially all of the households we cover in the U.S. have access to cable modem and/or DSL
Internet services, leading us to conclude that our rapid subscriber growth rates reflect the mass market appeal and
robust customer demand for our differentiated services, even in the presence of highly competitive wireline
broadband alternatives. With the advent of mobile WiMAX and the expected introduction of mobile WiMAX in
mobile devices in the second half of 2008, we believe demand for our services will expand from the current cable/
DSL replacement business to more traditional wireless uses.
Our pre-WiMAX network, utilized in the markets in which we offered our services as of December 31, 2007, relies
on network infrastructure equipment that is based on non-line-of-sight, or NLOS, Orthogonal Frequency Division Mul-
tiplexing, or OFDM, Expedience technologies acquired from Motorola, Inc. We intend to deploy a network based on the
mobile WiMAX standard in all new markets, and we expect to commercially launch the first of those markets in the
second half of 2008. In addition, we expect manufacturers to offer a number of handheld communications and consumer
electronic devices that will be enabled to communicate using our mobile WiMAX network.
In addition, we and Intel Corporation, or Intel, have agreed to jointly develop, promote and market a mobile
WiMAX service offering as a co-branded service available over Clearwire’s mobile WiMAX network in the
United States. This service will target users of notebook computers, UMPCs, and other mobile computing devices
containing Intel microprocessors.
We are an early stage company, and as such we are investing heavily in building our network and acquiring
other assets necessary to expand our business. As a result, we have a history of operating losses and expect to have
significant losses in the future. As of December 31, 2007, our accumulated deficit was approximately $1.19 billion,
and our total indebtedness was approximately $1.26 billion. We believe our cash and short-term and long-term
investments afford us adequate liquidity for at least the next 12 months, although we may raise additional capital or
refinance existing indebtedness during this period if acceptable terms are available. We expect to require substantial
additional capital in the future to fund our business and our success and viability will depend on our ability to raise
additional capital on reasonable terms.
Business Strategy
We intend to continue to grow our business by pursuing the following strategies:
•Deploy our service in new markets and increase our subscriber base rapidly. We intend to deploy our
network in markets in the United States and Europe that we find attractive. We believe that this deployment
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