Clearwire is shaking things up in the executive suite as the company prepares for its nationwide network roll out.
On Tuesday, the company, which is promising to blanket the country with superfast wireless service, named William T. Morrow, 49, as its new CEO, replacing Ben Wolff, a co-founder of the company and current CEO of Clearwire. Wolff will become co-chairman of the board, a position he will share with Clearwire's other founder and current chairman, Craig McCaw.
Clearwire has raised more than $3 billion to build a nationwide broadband wireless network using a technology called WiMax. Late last year, it officially combined spectrum assets from cellular phone provider Sprint Nextel. The company, which has strategic investors such as Intel, Google, Time Warner Cable and Comcast, says it plans to have a nationwide high-speed wireless network up and running to 120 million people by the end of 2010. It already offers service in Baltimore and Portland, Ore. And more cities are expected to be added soon with even more to follow in 2010.
The new Clearwire has a very strong position in terms of spectrum. And the company believes it has a good head-start compared with rivals, such as Verizon Wireless, which plans to roll out its 4G wireless network using a competing technology called Long Term Evolution, or LTE, starting next year.
Peter Currie, a director on Clearwire's board, said it was time to expand the talent of the Clearwire team and to bring in a person, who could execute on building the rest of the network and manage the business as it grows.
"When we closed the Sprint transaction and added $3 billion in new capital, the principal mission of the business changed, " he said. "Ben (Wolff) is incredibly versatile and talented. He is the best deal guy. But we needed more people and more human resources to get this network done with a nationwide footprint. Bill (Morrow) is a really experienced and wonderful manager. He is also deeply technical and we believe he will add a lot both in driving new business and saving capital."
Currie pointed out that Morrow has had a long career in the telecom market at AirTouch, as well as Vodafone. While at Vodafone, Morrow held a series of jobs, including chief executive officer of Vodafone, Europe; chief executive officer of Vodafone UK; and president of Vodafone KK in Japan. Most recently he served as president and CEO of Pacific Gas & Electric in San Francisco.
Morrow takes the reigns at Clearwire at a critical time. The company is in a race against time to get its network up and running before competitors, such as Verizon Wireless build their own networks. Building any new network is expensive, and the current economic malaise is only making it more difficult for Clearwire to execute on its plans. The company recently reported that it generated about $20.5 million in revenue and lost $118 million in the fourth quarter of 2008.
What's more, some of the company's biggest strategic investors have already had to take write-downs on their investments because the company's stock has been so battered as the economy sinks deeper into recession.
"The challenge right now is to build this high speed mobile network across the U.S. and other parts of the world," Currie said. "And that comes in several steps. The next challenge is to get all the systems up and running. And the economy plays a role in all of this because it all has to be paid for. But I think the company has plenty of runway."
Currie acknowledged that some of Clearwire's biggest partners have already taken a significant hit. But he emphasized that they are still committed to Clearwire's mission.
"What's happening with the strategic investors reflects what is happening in the stock market," he said. "But these companies invested in the first place because what Clearwire is doing is strategically important for them. There is not a full wireless broadband network available today. And creating one still is still strategically valuable."
There's no question that broadband wireless is the future. Just ask anyone who has a smartphone and you'll likely hear that people are ready for a faster mobile Web experience right now. But the question is how well Clearwire can execute on its plans. Not only is building a new network time consuming expensive, but Clearwire will also need to help foster an efficient ecosystem with products that support the technology. And the pricing and marketing of these devices and the corresponding service will have to be right to encourage increasingly frugal consumers to spend money on the new service.