Why did Craig McCaw really Resign

"Clearwire founder Craig McCaw Resigns from board

Wireless pioneer Craig McCaw has resigned as chairman of Clearwire, the Kirkland broadband wireless company that he founded seven years ago. McCaw's decision comes at a tough time for the company.

Clearwire -- backed by the likes of Intel, Comcast, Google and Sprint -- cut 15 percent of its staff in November amid financing challenges. The company also is facing new competition from Verizon, which just recently started aggressively promoting a rival mobile broadband service in many of the markets where Clearwire operates. Meanwhile, Clearwire's stock is down nearly 24 percent on the year.

McCaw had served as chairman for seven years, and his departure has raised some alarm bells about the future of the company.

Stock analyst Michael Mahoney tells Bloomberg News that McCaw in many respects "is Clearwire," and his resignation from the board (effective today) could raise concerns that the company is close to hitting the wall.

It also may signal that McCaw is stepping out of the way so a new ownership structure can be put in place.

According to a SEC filing, McCaw's resignation is not due to "any disagreements with the Company on any matters relating to the Company’s operations, policies, or practices." McCaw's investment firm, Eagle River, still retains the right to to nominate a director to Clearwire board. The SEC filing indicated that Eagle River intends to nominate Ben Wolff, the former CEO of Clearwire.

There's been a decent amount of turnover on the Clearwire board in recent months. In September, three Sprint executives -- including Dan Hesse, Keith Cowan and Steven Elfman -- announced plans to step down from the board. The company said that the executives resigned "out of an abundance of caution to address questions raised by Clearwire regarding new developments in antitrust law."

Clearwire's stock is down more than one percent this morning, trading at $5.17. The company went public in 2007, closing its first day of trading at $24.52. "

http://www.techflash.com/seattle/2010/12/craig-mccaw-resigns-from-clearwire-board.html

LightSquared's Wholesale LTE Network Challenges Clearwire's Dominance in 4G Wireless Services

By Ashok Bindra

TMCnet Contributor

As reported in Bloomberg's (News - Alert) business briefs on Monday, billionaire Philip Falcone’s LightSquared (News - Alert) plans to expand in as many as nine U.S. metro areas next year, challenging Clearwire Corp.’s lead in offering 4G wireless services.

The report shows that LightsSquared, backed by Falcone’s Harbinger Capital Partners hedge fund, will extend its network to Dallas, Chicago and Minneapolis in 2011, with plans to extend its reach to 11 additional cities by 2012, including New York, San Francisco and Los Angeles.

With a mission to revolutionize the U.S. wireless industry through the creation of the first-ever wholesale-only nationwide 4G-LTE (News - Alert) network, LightSquared’s documents show the company will offer 4G service largely in the middle of the country first and then expand to the coasts.

While Sprint Nextel Corp. currently markets 4G through a venture with Clearwire,AT&T Inc. and Verizon Wireless are planning to enter the fray in the coming months.

In an interview given to Bloomberg, Steve Clement, an analyst with Pacific Crest Securities in Portland, Oregon, said, “It’s an ambitious plan. If these guys can get it up and running well,Clearwire (News - Alert) will have a reason to be concerned.”

Likewise, speaking to Bensinger in New York, LightSquared CEO Sanjiv Ahuja confirmed the content of the documents, adding that some specifics have changed since they were distributed late last year. Ahuja, who ran Orange SA in Europe, said he sees an opportunity to bring better and more innovative service to the United States.

Ahuja said that, “there is a big demand-supply gap and we are trying to step in and fill some of that.

“In terms of wireless penetration, the United States today is nowhere near the top countries,” he added.

Anyway, according to documents given to Bloomberg, Reston, Virginia-based LightSquared intends to add 300 base stations this year, with plans to add about 5,000 by the end of 2011. And, in 2012, LightSquared projects to add nearly 13,000 base stations in 11 more metropolitan areas. According to the company CEO, LightSquared is on track to begin constructing its network in December.

LightSquared, formed through Falcone’s acquisition of SkyTerra Communications Inc., plans to sell capacity on its network to cable providers, consumer electronics companies and technology companies. Consequently, a personal computer maker or television manufacturer could sell wireless service to the consumers while simultaneously selling their own products, said LightSquared.

As reported, and confirmed by a company spokeswoman, the first trials will begin in Baltimore, Denver, Las Vegas and Phoenix and the first commercial switch-ons are expected in the third quarter of 2011. Meanwhile, research data shows that Clearwire is now active in almost 50 markets, from large cities to suburbs, while Verizon plans to launch LTE services in 25-30 markets in the fourth quarter. Many smaller players, plus non-cellcos like the cable providers, may look to wholesale partners for their own 4G offerings, though flat rate specialist MetroPCS and cableco Cox (News - Alert) are going it alone, says Bensinger. Meanwhile, MetroPCS is expected to launch its first LTE services within weeks in Dallas and Las Vegas.

By 2015, LightSquared expects to cover at least 92 percent of people in the U.S. with its wireless broadband network, according to the company’s vision statement.

Ashok Bindra is a veteran writer and editor with more than 25 years of editorial experience covering RF/wireless technologies, semiconductors and power electronics. To read more of his articles, please visit his columnist page.

http://it.tmcnet.com/topics/it/articles/98932-lightsquareds-wholesale-lte-network-challenges-clearwires-dominance-4g.htm

Harbinger Capital Partners Lightsquared Threatens Clearwires Turf

"Falcone’s LightSquared to Take on Clearwire in Chicago, Dallas

August 31, 2010, 12:04 AM EDT

Aug. 31 (Bloomberg) -- Billionaire Philip Falcone’s LightSquared plans to expand to as many as nine U.S. metro areas next year, challenging Clearwire Corp.’s lead in offering fourth-generation wireless services, company documents show.

The closely held venture, backed by Falcone’s Harbinger Capital Partners hedge fund, will extend its network to Dallas, Chicago and Minneapolis in 2011, according to documents sent to potential partners. The company’s network may grow to 20 cities in 2012, including New York, San Francisco and Los Angeles.

Falcone started LightSquared on the assumption the U.S. wireless industry has room for another entrant.

The documents show the company will offer 4G service largely in the middle of the country first and then expand to the coasts.

Sprint Nextel Corp. already markets 4G through a venture with Clearwire; AT&T Inc. and Verizon Wireless plan to do so in the coming months.

“It’s an ambitious plan,” Steve Clement, an analyst with Pacific Crest Securities in Portland, Oregon, said in an interview. “If these guys can get it up and running well, Clearwire will have a reason to be concerned.”

LightSquared Chief Executive Officer Sanjiv Ahuja confirmed the content of the documents, adding that some specifics have changed since they were distributed late last year. Ahuja, who ran Orange SA in Europe, said he sees an opportunity to bring better and more innovative service to the U.S.

“There is a big demand-supply gap and we are trying to step in and fill some of that,” he said in an interview in New York. “In terms of wireless penetration, the United States today is nowhere near the top countries.”

Wholesale Model

LightSquared, formed through Falcone’s acquisition of SkyTerra Communications Inc., plans to sell capacity on its network to cable providers, consumer electronics companies and technology companies.

That way a personal computer maker or television manufacturer could sell wireless service to consumers at the same time they sell their devices.

With 4G Technology, the users of devices including smartphones can surf the Internet and download data more easily than with existing technology.

“We are negotiating across all categories,” said Ahuja, 54, declining to provide company names. He said he was close to completing agreements with 10 technology companies, and “many of them could take several months to get finalized.”

LightSquared, based in Reston, Virginia, had expected this year to add 300 base stations, which handle network traffic, and about 5,000 by the end of 2011, according to the documents. Ahuja said LightSquared’s base station targets had changed and declined to give specific figures.

In 2012, LightSquared will add about 13,000 base stations in 11 more metropolitan areas, according to the documents.

LightSquared is on track to begin constructing its network in December, Ahuja said.

Clearwire Competition?

Clearwire may see the most direct competitive threat from LightSquared, according to Clement. Clearwire, majority owned by Sprint, sells wholesale capacity on its network to corporate partners, in addition to marketing its Clear brand wireless service directly to U.S. consumers.

Clearwire has a head start, offering 4G service to roughly 56 million people. The company built its network to encompass about 50 U.S. cities since January 2009, said Jeremy Pemble, a spokesman for the Kirkland, Washington-based company. By the end of 2010, it will expand to Boston, New York, San Francisco and Los Angeles, he said.

Carriers are moving into 4G as consumers’ usage habits swing more heavily toward data use, such as video streaming and photo sharing. Chetan Sharma, an independent analyst, expects consumers to double their average data use by year’s end, compared with 2009.

LightSquared has reached out to about 35 technology companies, Ahuja said. “Our negotiations have progressed on a much faster pace than we had originally planned for,” he said.

LightSquared has agreements with several firms to provide devices to carriers who buy its wireless capacity. The company aims to provide terrestrial coverage, supplemented by two satellites, to reach at least 260 million people over the next five years.

--Editors: Peter Elstrom, Kevin Miller

To contact the reporter on this story: Greg Bensinger in New York at gbensinger1@bloomberg.net

Source

http://www.businessweek.com/news/2010-08-31/falcone-s-lightsquared-to-take-on-clearwire-in-chicago-dallas.html