Clearwire 2008 Annual Report Download - page 75

(
In thousands, except percenta
g
es) 2008 2007
D
olla
r
C
han
ge
Percenta
ge
Chan
g
e
Y
ea
rEn
ded
December
31,
R
evenue
.................................
$230,646 $151,440 $79,206 52.3%
R
evenue in the United States represented 84% and international represented 16% of total revenue for the year
e
nded December 31, 2008 compared to 81% and 19% for the year ended December 31, 2007, respectively. Total
s
ubscribers in all markets
g
rew to approximatel
y
475,000 as of December 31, 2008 (actual) from approximatel
y
3
94,000 as of December 31, 2007 (pro forma). The
g
rowth in subscribers and the increase in services available t
o
c
ustomers were the primary reasons for the increase in revenue when comparing the year ended December 31, 2008
t
ot
h
e year en
d
e
d
Decem
b
er 31, 2007. We expect revenues to
i
ncrease
d
ue to t
h
ero
ll
out o
f
new mo
bil
eW
i
MAX
m
arkets, which will increase our subscriber base, and an increase in service offerin
g
s in 2009. In addition, we expec
t
t
hat ARPU will be similar to current levels because increases from multiple service offerin
g
s per customer, wil
l
lik
e
l
y
b
eo
ff
set
b
yt
h
e
i
mpact o
f
promot
i
ona
l
pr
i
c
i
ng. We expect t
h
at c
h
urn w
ill i
ncrease
i
n our pre-W
i
MAX mar
k
ets
as we transition these networks to mobile WiMAX technolo
gy
.
Cost of goo
d
san
d
services an
d
networ
k
costs. Costs o
fg
oo
d
san
d
serv
i
ces an
d
networ
k
costs pr
i
mar
ily
i
ncludes costs associated with tower rents, direct Internet access and backhaul, as well as network related ex
p
enses
.
Cost o
fg
oo
d
san
d
serv
i
ces an
d
networ
k
costs a
l
so
i
nc
l
u
d
es certa
i
n networ
k
equ
i
pment, s
i
te costs,
f
ac
ili
t
i
es costs,
s
o
f
tware
li
cens
i
n
g
an
d
certa
i
no
ffi
ce equ
i
pment
.
(
In thousands, except percentages
)
2008 200
7
D
olla
r
Change
Percenta
ge
Change
Year Ended
D
ecember
31,
C
ost of
g
oods and services and network costs
....
$
285,759 $156,146 $129,613 83.0%
Th
e
i
ncrease
i
n cost o
f
goo
d
san
d
serv
i
ces an
d
networ
k
costs was pr
i
mar
il
y
d
ue to an
i
ncrease
i
nt
h
e num
b
er o
f
t
owers,
i
ncreases
i
n
di
rect Internet access an
d
re
l
ate
db
ac
kh
au
l
costs an
d
a
ddi
t
i
ona
l
expenses as we
l
aunc
h
e
d
an
additional market in 2008 and
p
re
p
ared for future mobile WiMAX builds from December 31, 2007 to December 31
,
2
008. We expect costs of goods and services and network costs to increase significantly in 2009 as we expand our
n
et
w
or
k
.
S
e
ll
ing, genera
l
an
d
a
d
ministrative expense. SG&A
i
nc
l
u
d
es a
ll
o
f
t
h
e
f
o
ll
ow
i
ng: treasury serv
i
ces,
h
uma
n
r
esources and other shared services that were provided b
y
Sprint prior to the Closin
g
; salaries and benefits, sales
c
ommissions, travel expenses and related facilities costs for the followin
g
personnel: sales, marketin
g
, network
d
ep
l
oyment, execut
i
ve,
fi
nance an
d
account
i
ng,
i
n
f
ormat
i
on tec
h
no
l
ogy, customer care,
h
uman resource; networ
k
deplo
y
ment expenses representin
g
non-capitalizable costs on network builds in markets prior to launch, rather than
c
osts related to our markets after launch which is included in cost of
g
oods and services and network costs; and cost
s
assoc
i
ate
d
w
i
t
h
a
d
vert
i
s
i
ng, tra
d
es
h
ows, pu
bli
cre
l
at
i
ons, promot
i
ons an
d
ot
h
er mar
k
et
d
eve
l
opment programs an
d
t
hi
r
d
-part
y
pro
f
ess
i
ona
l
serv
i
ce
f
ees.
(
In thousands, except percentages
)
2008 2007
D
olla
r
C
hang
e
Percenta
ge
Change
Year Ende
d
December
31,
Selling, general and administrative expense
.
.....
.
$484
,
421 $461
,
553 $22
,
868 5.0
%
T
he increase in SG&A was due to additional costs related to the launch of mobile WiMAX services, which was
o
ff
set
b
yre
d
uct
i
ons
i
n emp
l
oyee
h
ea
d
count an
d
re
l
ate
d
expenses. Our emp
l
oyee
h
ea
d
count was approx
i
mate
ly
1
,635 at December 31, 2008 (actual) compared to approximately 2,510 employees at December 31, 2007 (pr
o
forma). Our focus in 2009 and 2010 will be on develo
p
ment and ex
p
ansion of our wireless 4G network. We ex
p
ec
t
th
at CPGA w
ill i
ncrease as new mar
k
ets are
l
aunc
h
e
d
, cons
i
stent w
i
t
h
our past operat
i
ng exper
i
ences.
De
p
reciation an
d
amortizatio
n
(
In thousands, except percentages
)
2008 200
7
D
o
ll
a
r
C
hang
e
P
ercentag
e
Change
Y
ear Ended
December
31,
D
epreciation and amortizatio
n
.
................
.
$
128
,
602
$
80
,
766
$
47
,
836 59.2%
6
3