Kirkland wireless company Clearwire just named John Stanton its chief executive on an interim basis, replacing William Morrow, who resigned from the position and the board.
Stanton is Clearwire’s chairman and a giant in the wireless industry. He was formerly chief executive of Western Wireless and VoiceStream Wireless, which was sold to Deutsche Telekom and became T-Mobile USA.
Perhaps investors saw it coming. Clearwire stock closed up 6.88 percent today, at $5.75, on unusually high volume.
Clearwire said Morrow cited personal reasons for his resignation.
Also leaving are several of Morrow’s lieutenants, including Chief Commercial Officer Mike Sievert, a former Microsoft executive who led Windows Vista maketing, and Kevin Hart, Clearwire’s chief information officer.
Clearwire said it’s promoting Erik Prusch, chief financial officer, to a new position as chief operating officer responsible for day-to-day operations. The company also promoted Hope Cochran, senior vice president and treasurer, to CFO.
Stanton said Morrow’s decision to leave “represented a timely opportunity for us to make a number of other organizational changes.”
“My belief is you’re way better (off) making a whole series of organizational changes at once, rather than trying to dribble things out,” he said.
A search has begun for a permanent replacement chief executive, although that could be a short-term job. There’s continued speculation that Clearwire will be acquired by a larger company such as T-Mobile.
Stanton said he will not become the permanent chief executive. “No – let me spell that for you – n, o,” he said.
“I have a lot of interests,” he explained. “I have agreed to do this because there was a need and I was chairman of the board and I have a responsibility and frankly because I love Clearwire.”
Clearwire has struggled in recent years as the cost to build its 4G Wimax network outpaced the growth of subscription revenue and the patience of investors.
Morrow (below), former chief executive of Pacific Gas & Electric and a veteran of Vodafone, took the job in early 2009.
Losses forced Morrow last November to halt the expansion of its retail network, lay off 15 percent of its employees and delay launches in several big markets.
Yet the company continued to grow subscriptions. At the end of 2010 it had 4.4 million subscribers, up 540 percent, including 1.5 million added during the fourth quarter.
Morrow said during the February earnings report that Clearwire expects to more than double subscriptions in 2011 and achieve positive earnings before taxes and depreciation in 2012. The company could “potentially become cash flow positive thereafter without the need for additional funding,” he said in the Feb. 17 release.
Meanwhile Clearwire’s facing stiff competition as networks boost their wireless speeds and roll out new technologies such as the LTE network that Verizon’s now operating.
Clearwire was the first fourth-generation wireless service available to consumers but now LTE is available and AT&T and T-Mobile have coaxed “4G” speeds from their existing networks.
Stanton doesn’t think the cachet of Clearwire’s 4G service is gone, though.
“The first to market, first mover advantage is significant,” he said. “Frankly the others that have come along have had to do a lot of ‘me-too’ advertising and promotion whereas as a result of their relationship with us, Sprint is viewed as the leader in 4G.”
With other 4G services available, “it means we’ve got to run hard to maintain our lead but Clearwire really represents, unambiguously, the leader in 4G,” Stanton said.