Clearwire Chair Craig McCaw has resigned from the cash-strapped WiMax maker, saying no disagreements prompted the move. A Clearwire co-chair has been named to replace him.
Clearwire Chairman Craig McCaw, offering two days' notice, has resigned,
according to a
Dec.
29 filing with the Securities and Exchange Commission. According to the
filing, McCaw's decision to leave the company was "not due to any disagreements
with [Clearwire] or any matters relating to [Clearwire's] operations, policies
or practices."
McCaw's departure is nonetheless notable, as the company has been publicly
struggling to maintain the financing it needs to continue building out its 4G
network.
Clearwire was the first company to offer a 4G network ("CLEAR")
to American consumers, in the form of WiMax technology. It was originally
funded in 2008 by Sprint Nextel, Google, Time Warner Cable, Comcast, Intel and
others, according to
Bloomberg, and
many of these investors again contributed to a $1.56 billion round of funding
in 2009, when the company announced it was low on cash.
Sprint, which owns a 51 percent share of the company and offers its own
branded 4G service via Clearwire, has worked hard over the last several quarters
to rebuild its own struggling brand-a thing it
has begun succeeding in, thanks in part to its 4G offering and complementary
4G smartphones-and so has distanced itself from Clearwire. While some have
suggested it's a likely candidate to purchase Clearwire, Bloomberg reports that
earlier in December the carrier said it "has no plans to take that step."
In November 2010, facing difficulties in the continued build-out of its 4G
network and announcing it may only have enough cash to reach mid-2011, it
sold
more than $1.3 billion in debt, in a deal consisting of three parts-a first
lien of $175 million and a second lien of $500 million, plus a $650 million
sale of 8.25 percent exchangeable notes due in 2040.
During a talk at a JP Morgan conference on Dec. 3-the same day that
Clearwire released a statement on the sale of the debt-Clearwire CFO Erik
Prusch told attendees, according to Reuters, "We're comfortable about where
we're going to be at the end of the year. Certainly this gives us plenty of new
flexibility."
During a call with investors three days later, Prusch was again optimistic,
saying, according to Bloomberg, "This really gives us the runway that we were
looking to in terms of funding our operations."
McCaw, who served as Clearwire chairman for two years, was closely tied to
the brand, and his departure leaves many wondering what the repercussions of
his move, if any, will be.
According to the SEC filing, the 61-year-old McCaw was nominated to his
position by Eagle River Holdings, an investment group, which has the right to
nominate his replacement.
In McCaw's place, states the filing, "it intends to nominate Benjamin G.
Wolff," a young 40-something who was formerly a co-chairman of Clearwire and is
currently the CEO of ICO Global
Communications. According to
Forbes,
Wolff has also served as the president of the Eagle
River group.
On Dec. 28, Clearwire officially extended its service to San
Francisco, Oakland
and other parts of the Bay Area, bringing its number of available markets to
71.
"We're offering game-changing access to the Internet," Allan Lamb, regional manager for CLEAR, said in a statement. "For the first time,
consumers are able to wirelessly access the Internet at superfast speeds, at
affordable prices, and without limits on how much 4G data they use."
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