Stock of Clearwire’s majority owner, Sprint Nextel, rose more than 9 percent in early trading after Clearwire announced late yesterday that CEO Ben Wolff would be replaced by telecom veteran Bill Morrow. Clearwire’s stock was mostly flat in early trading.
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“It’s a reflection of the market realities that Clearwire and its board faces,” says Ashvin Vellody, senior vice president of enabling technologies at the Yankee Group. “They have a very clear financial goal and it has to be met. Execution, to as large an extent as possible, will determine its success in the next few months.”
Morrow has held a number of senior executive positions at Vodafone’s United Kingdom, Europe and Japan segments. He also served as president of Japan Telecom Co. and held senior executive positions with wireless carrier AirTouch International. He was most recently president and CEO of Pacific Gas & Electric in San Francisco.
Wolff will now serve as co-chairman with current Chairman Craig McCaw, focusing on strategy, finance and managing the relationships with Clearwire’s investment partners.
The move comes as Clearwire prepares to build out a nationwide WiMAX network, burning through $1.5 billion to $1.9 billion of its investment capital in the next year. The company must move quickly to stay ahead of Verizon Wireless’ competing LTE technology, which should go live by the end of the year on a limited basis.
John Stanton, who spoke on behalf of Clearwire, said the company needed a CEO with extensive operating experience as the company prepares to move forward. Morrow’s operating experience makes him well suited for the task at hand. “Now clearly the focus is to turn the operation and bring it to scale, and bring a huge talent operator to lead that effort,” Stanton said. “You’d be hard-pressed to find very many people who have the operating resume that Bill has.”