Clearwire 2010 Annual Report Download - page 80

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CLEARWIRE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. Description of Business
We are a leading provider of 4G wireless broadband services. We build and operate next generation mobile
broadband networks that provide high-speed mobile Internet and residential access services, as well as residential
voice services, in communities throughout the country. Our 4G mobile broadband network provides a connection
anywhere within our coverage area.
In 2010, we focused on building out and augmenting our networks, increasing our retail and wholesale
subscriber bases, expanding our wholesale partnerships, and obtaining additional capital. We increased the number
of people covered by our networks by over 72.4 million in 2010, and increased our total subscriber base by almost
3.7 million subscribers. As of December 31, 2010, we offered our services in 88 markets in the United States
covering an estimated 114.2 million people, including an estimated 112.0 million people covered by our 4G mobile
broadband network in 71 markets. We ended the year with approximately 1.1 million retail and 3.3 million
wholesale subscribers. We have deployed our mobile Worldwide Interoperability of Microwave Access, which we
refer to as WiMAX, technology, based on the IEEE 802.16e standard, in our launched markets using 2.5 GHz
Federal Communications Commission, which we refer to as FCC, licenses. As of December 31, 2010, the
remaining 17 markets in the United States continue to operate with a legacy network technology. Internationally, as
of December 31, 2010, our networks covered an estimated 2.9 million people. We offer 4G mobile broadband
services in Seville and Malaga, Spain and a pre-4G network in Brussels and Ghent, Belgium.
In 2011, we will focus on improving the operating performance of our business while seeking to raise
additional capital to continue the operation and expansion of our business and the development of our 4G mobile
broadband network.
Company Background
We started operations on January 1, 2007 as a developmental stage company representing a collection of
assets, related liabilities and activities accounted for in various legal entities that were wholly-owned subsidiaries of
Sprint Nextel Corporation, which we refer to as Sprint or the Parent. The nature of the assets held by the Sprint legal
entities was primarily 2.5 GHz Federal FCC licenses and certain property, plant and equipment related to the
WiMAX network. The acquisition of the assets was funded by the Parent. As Sprint had acquired significant
amounts of FCC licenses on our behalf in the past, these purchases have been presented as part of the opening
business equity as principal operations did not commence until January 1, 2007, at which time the operations
qualified as a business pursuant to Rule 11-01(d) of Regulation S-X. From January 1, 2007 through November 28,
2008, we conducted our business as the WiMAX Operations of Sprint, which we refer to as the Sprint WiMAX
Business, with the objective of developing a next generation wireless broadband network.
On May 7, 2008, Sprint announced that it had entered into a definitive agreement with the legacy Clearwire
Corporation, which we refer to as Old Clearwire, to combine both of their next generation wireless broadband
businesses to form a new independent company to be called Clearwire Corporation, which we refer to as Clearwire.
In addition, five independent partners, including Intel Corporation, Google Inc., Comcast Corporation, Time
Warner Cable Inc. and Bright House Networks LLC, collectively, whom we refer to as the Investors, agreed to invest
$3.2 billion in Clearwire and its subsidiary Clearwire Communications LLC, which we refer to as Clearwire
Communications. On November 28, 2008, which we refer to as the Closing, Old Clearwire and the Sprint WiMAX
Business completed the combination to form Clearwire, and the Investors contributed a total of $3.2 billion of new
equity to Clearwire and Clearwire Communications. Prior to the Closing, the activities and certain assets of the
Sprint WiMAX Business were transferred to a single legal entity that was contributed to Clearwire Communications
at close in exchange for an equity interest in Clearwire. The transactions described above are collectively referred to
as the Transactions. Immediately after the Transactions, we owned 100% of the voting interests and 27% of the
economic interests in Clearwire Communications, which we consolidate as a controlled subsidiary. Clearwire holds
no assets other than its interests in Clearwire Communications.
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