In just the latest round of turmoil to hit WiMax high-speed wireless provider Clearwire (NSDQ: CLWR), the company’s CEO and two prominent executives are stepping down amid continued losses and a dispute with perhaps its most important corporate ally.
CEO Bill Morrow has resigned from his role at the company, citing personal reasons. He’ll be replaced by current Chairman of the Board John Stanton on an interim basis, and two other prominent Clearwire executives–Mike Sievert, chief commercial officer, and Kevin Hart, CIO–are also stepping down. Morrow, Sievert, and Hart will remain with Clearwire during an unspecified advisory in which Stanton, a veteran of such wireless firms as Alltel (NYSE: AT) and VoiceStream (which later became T-Mobile USA), will assume control.
At a time when demand for always-connected mobile devices is soaring, you’d think Clearwire would be in an ideal position. The company is one of the most prominent backers of WiMax, a metro-area wireless networking technology that’s like Wi-Fi but can spread over the size of a city. But it’s been a tough road for the company since prominent industry heavyweights like Sprint (NYSE: S), Intel (NSDQ: INTC), Google (NSDQ: GOOG), and others kicked in substantial investments to help it build out a 4G network that can currently be accessed in 70 metropolitan areas, according to the company.
WiMax has failed to get any U.S. backers outside of Sprint,as the other three major U.S. carriers pursue faster networks based on different standards. Any national wireless network takes significant time to build, and it took quite some time before Clearwire’s service was available outside a few key markets. With Clearwire’s fortunes struggling in 2009, Google declined to participate in another round of investment in the company, with company executives acknowledging privately they were more focused on other wireless standards more broadly used around the world.
Wireless industry legend and Clearwire founder Craig McCaw stepped down from the company in late 2010, and it has continued to post losses. And even Sprint, which sold its Xohm business to Clearwire in order to get the company’s main WiMax push started and has embraced the wireless standard, has started to distance itself from the company, passing on an option to purchase debt from Clearwire and removing three Sprint executives from Clearwire’s board of directors. The companies are also in the middle of a dispute over how much Sprint should be paying to use Clearwire’s spectrum, which Clearwire addressed in its release about Morrow’s departure: “Today’s changes in executive leadership are not expected to impact the company’s progress on an agreement with Sprint to resolve wholesale pricing disputes. Clearwire believes that an agreement with Sprint is imminent.”
To top it all off, Clearwire is facing a lawsuit over charges that it throttled data speeds for its users. It’s not clear what kind of endgame Clearwire might be entering at the moment, but it’s obviously going to take a lot to get the company rolling again, and might have prompted some of the recent discussions between Sprint and T-Mobile about joining forces. If Sprint doesn’t think it can rely on Clearwire for WiMax 4G service, it would have no choice but to look elsewhere.