Under a new CEO, Clearwire keeps its two-year, 80-city WiMAX goal
The appointment of William Morrow -- a former executive at Vodafone and Pacific Gas & Electric (PG&E) -- as Clearwire's new CEO comes at a time when the company badly needs to gain industry traction to offset financial losses and retain an early market lead in the US over LTE, a rival 4G technology set for deployment in 2010 by both Verizon Wireless and AT&T.
Morrow said in a statement on Monday that Clearwire now intends to deploy WiMAX in over 80 markets -- to as many as 120 million people -- by 2010.
Clearwire is currently in commercial deployment with WiMAX in only two metropolitan areas: Portland, Ore., and parts of Baltimore, Md. In reporting financial results last week, however, Clearwire identified eight more US cities as targets for deployment in 2009: Atlanta; Chicago; Charlotte, N.C.; Dallas/Fort Worth; Honolulu; Philadelphia, and Seattle.
Also last week, Clearwire listed five more cities -- New York City; San Francisco; Washington, DC; Boston; and Houston -- as markets for WiMAX deployment in 2010. Clearwire hasn't yet specified the locations of the remaining geographic areas in the 80 markets set for rollout by 2010.
In its financial results, however, Clearwire reported a net loss of $118.02 million for the fourth quarter ended December 21, 2008.
Founded in May 2008 with over $3 billion in initial funding from Intel, Google, and three cable companies, the current Clearwire entity is the result of a merger integrating an earlier Clearwire company with the WiMAX assets of US telecom operator Sprint.
Although Clearwire's total assets skyrocketed from $3.14 billion in 2007 to $9.12 billion a year later, its number of wireless Internet customers stepped up by only about 80,000, from 394,000 in 2007 to 475,000 in 2008.
In addition to naming Morrow its new CEO this week, Clearwire also announced that its interim CEO, Benjamin Wolff, will now join Craig McCaw as co-chairman of Clearwire's board of directors.
Morrow will face big challenges in helping to steer Clearwire's course against US competitors. Unlike LTE, which can be installed as an upgrade to existing WCDMA/HSPA networks, WiMAX will require the launch of an ambitious and costly new network.
Yet Morrow arrives at Clearwire with some successful experience at telecom turnarounds, along with an international background. As CEO of Vodafone's operations in Japan earlier in this decade, he shaped the then-failing business unit into one of the the international phone company's most lucrative units. Before that, Morrow served as CEO of Vodafone UK.
Morrow, however, has engaged in some job hopping in recent years. In April 2006, Vodafone moved Morrow from Japan to head up Vodafone Europe as part of a company reorganization. Just three months later, Morrow abruptly left Vodafone Europe, saying that he needed to return to the US for family reasons.
Morrow took over the CEO spot at PG&E in the spring of 2007, only to exit that job in July 2008, citing plans to pursue opportunities for returning to the telecom industry.
PG&E showed decent if not stellar results under Morrow's stint as CEO, posting net income in 2007 of $1 billion, or $2.78 per share, compared with $991 million, or $2.76 per share, in 2006.
Morrow is also credited with successfully directing an overhaul of PG&E aimed at improving the utility company's efficiency, supply chain, and customer focus.
Meanwhile, as co-chairman of Clearwire, Wolff will now focus on Clearwire's financing and strategic opportunities. Wolff will also continue to serve as president of McCaw's investment company, Eagle River, and as a board and Executive Committee member of the CTIA trade association.