If part of Clearwire’s new mantra is a low-profile, cost-savings marketing plan, its presence at CTIA couldn’t have been done better. Instead of a show-floor booth, the nascent national provider of WiMAX services took meetings in a simple gray cubicle at the very back of the meeting-room layout, with a simple block-lettered sign saying “Clearwire” to let you know you were at the right place. Inside, newly minted Chief Financial Officer Hope Cochran spent the week trying to convince anyone who would listen that the company was in pretty good shape, with a confident plan aimed at reaching profitability within a year or so. The question is, are there any believers?
Though the company might be forgiven if its ego is battered from recent events which include the departure of CEO Bill Morrow, chief commercial officer Mike Seivert and a fairly public slapdown of its retail operations from majority shareholder Sprint, longtime Clearwire veteran Cochran said that instant change has been a hallmark of the company since its early days, and even claimed that the current state of affairs has given Clearwire something new, in a well-defined go-to-market plan.
“Ironically there is more clarity now then there ever has been,” said Cochran, speaking about the company’s new plan to concentrate fully on its wholesale operations, the main part of which is providing 4G WiMAX access for partner Sprint’s smartphone lineup. While Clearwire isn’t going to completely give up on its retail Clear brand and service, it’s obvious that moving forward Clearwire’s energy and strategic thinking is going to be centered around continuing to beef up its already-established network markets and support its wholesale partners, which now include retailer Best Buy who is finally reselling Clearwire’s services as previously announced.
While Cochran is as knowledgeable about Clearwire as any executive still employed there — her financial fingerprints have been all over the company’s sometimes complex debt-raising and other funding activities — the fact that a brand-new CFO was doing press interviews at CTIA (and not necessarily about financial matters) means there is an obvious leadership gap at Clearwire, one that needs to be filled soon if the company wants to seriously stay independent. As Clearwire looks for new leadership, however, Cochran said that having board member and industry veteran John Stanton wandering the hallways doesn’t hurt.
“It’s wonderful having John in [as interim CEO] because he’s a natural for the role,” said Cochran, alluding to Stanton’s resume (he was the founder of VoiceStream wireless and then later chairman of T-Mobile). “The mood is actually pretty energetic right now, and John has put a lot of focus on execution.”
The next priority for Clearwire is a positive resolution in the puzzling dispute it has had with Sprint, revolving around the amount of money Sprint pays Clearwire for each 4G smartphone subscription. With 1.42 million wholesale customers added during the fourth quarter of 2010 — Clearwire doesn’t break out its wholesale numbers by partner but you can assume that almost all of those are Sprint smartphone customers — it seems like the relationship is going well for both sides, so the more days that go by without an agreement just adds to the public confusion over the subject. And until an agreement over this issue can be put into place, Clearwire is obviously hindered from completing any other kind of network-based transaction that might help improve its finances, such as the sale or lease of some of its spectrum hoard. Farther off in the future is the possibility of Clearwire using its own spectrum to provide LTE-based services, which could theoretically be much faster than those offered by competitors like Verizon simply due to Clearwire’s abililty to build a bigger pipe thanks to its spectrum holdings.
In the meantime, however, there is a real business at Clearwire, in providing services for the 4.4 million customers already on its network in one fashion or another, a number the company expects to double by the end of 2011. Contrast this to recent media darling LightSquared, which seems to attract nothing but favorable publicity for its still-unexplained plan to offer wholesale LTE services, sometime in the future, on a network yet to be built. With $1.7 billion in its coffers at the end of 2010 and another $1.4 billion raised in debt, Cochran said Clearwire should be able to make its cash stretch to the point where the company is making enough money on its operations to fund itself, perhaps as soon as 2012.
“All I know is that we have a real network with wholesale partners today,” Cochran said when asked to compare the two companies. “We’ll have growth in 2011, a different kind of growth, but we have already spent the money we needed [to build a network]. Now it’s just heads down and making it work.”