Clearwire 2010 Annual Report Download - page 11

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Includes Eagle River and Intel with respect to Class B Common Stock and Clearwire Communications Class B
Common Units.
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Includes Eagle River and Intel (with respect to shares held in Old Clearwire that were converted into shares of
our Class A Common Stock upon closing of the Transactions).
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Sprint holds its equity interests in Clearwire and Clearwire Communications through Sprint HoldCo.
Business Strategy
We intend to focus on the following business strategies:
•Offering high speed mobile Internet services at competitive prices: We expect to continue to offer our
retail and wholesale subscribers a fast and mobile broadband connection that enables enhanced access to
information, applications and online entertainment, while also creating new ways for people to commu-
nicate with each other. Our 4G mobile broadband network is designed to serve our subscribers’ Internet
needs, while also providing subscribers with the flexibility to access our services anywhere and anytime in
our coverage area. We plan to continue to deliver our network services at competitive prices compared to
prior generation wireless services and other competing 4G plans. We believe that our high speed, mobile
broadband services offered at a fair price will continue to be attractive to prospective retail subscribers and
wholesale partners. Due to increased competition in the mobile broadband industry, our retail business will
continue to focus on providing our services with differentiation based in part on price and value.
•Driving toward positive cash flow: We are focused on improving the operating performance of our
business, and we currently believe that the actions we are taking in this area will cause our current business to
generate positive cash flows over the next few years without the need for additional capital. Achieving
positive cash flow from our operations will require that we substantially increase the revenue generated from
our wholesale business and materially reduce our expenses. To increase wholesale revenue, we intend to
focus on resolving our wholesale pricing disputes with Sprint, which currently accounts for substantially all
of our wholesale revenue, on acceptable terms. We also plan to increase both the number of wholesale
subscribers on our 4G mobile broadband network and the amount of usage of our network by those
subscribers. We expect this to be accomplished through the continued increased sales of wholesale services
by our partners and ongoing improvements in the quality and applications of 4G devices. At the same time,
we also intend to pursue a number of cost savings initiatives. We have already undertaken some cost
reduction measures, including reducing the numbers of employees and making reductions to discretionary
capital projects. However, we plan to achieve greater cost savings by reducing the expense and growth rate of
our retail business and reducing costs in other areas, such as network operations and general and admin-
istrative costs.
•Rapidly increasing our subscriber base: We have broadly deployed our mobile broadband services in
markets throughout the United States, with approximately 119 million people currently covered by our 4G
mobile broadband network as of February 17, 2011. This deployment has enabled us to rapidly increase our
subscriber base. In 2010, our total subscribers increased by almost 3.7 million to approximately 4.4 million.
The majority of our subscriber growth in 2010 was from our wholesale business, which increased by over
3.2 million subscribers. We expect the rapid growth in our subscriber base will continue in 2011, with the
vast majority of the growth coming from our Initial Wholesale Partners, primarily Sprint. We have also
entered into wholesale agreements with other partners that we believe will lead to new subscriber additions
during the year, and we will continue to seek additional wholesale partners. We also plan to continue to grow
our retail business in 2011, although at a slower pace than in prior periods. We will continue to offer our
services through multiple retail sales channels, including indirect sales representatives, company-owned
retail stores, independent dealers, Internet sales, telesales, national retail chains and manufacturers who
embed our high speed internet access capabilities into consumer electronic devices. However, we will focus
on the lower-cost sales channels as we take steps to decrease our retail subscription acquisition costs.
Although we expect our retail subscriber base will continue to grow in 2011, our cost-savings initiatives are
likely to result in slower growth in our retail business compared to prior years.
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