Executive Interview: Scott Richardson

Clearwire Corp. may not have the father of WiMAX under its wing in Chief Strategy Officer Scott Richardson, but he could very well be considered the father-in-law of WiMAX, Richardson said in a keynote last week at WiMAX World USA in Chicago. Clearwire’s mission is to provide the simplest, easiest way to connect customers to the Internet wherever they are, he said. But, based on Clearwire’s recent moves, it seems that’s just the beginning. From its deal to bring the former Amp’d Mobile Inc. content team on board to deliver a new entertainment offering under the Clearwire brand to its numerous ongoing trials in multiple technologies, the company is actively pushing the envelope on many fronts. “If you’re telling a story about Clearwire, I think the most compelling, anchoring piece and differentiator we have relative to the many players here is that we’re in business today. And on a market-by-market basis, we think we have a very successful business model,” Richardson said.
How much of a priority has Clearwire put on WiMAX? Does it comprise a significant share of your strategy going forward?
We put a huge priority on WiMAX. We are committed to making WiMAX happen. There comes a point in time in your deployment strategy of the current technology and how we’re winning customers and how you transition to WiMAX-we’ve kind of gone past a point where WiMAX is really everything that we’re planning on doing going forward. The reason is we’re starting to see the benefits, the economies of scale in the devices. We’re actually seeing some performance-capacity benefits of WiMAX that’s relative to our existing system. That we can take advantage of, but the user will kind of see the same experience and same devices. In the supply chain, we’ve started to see really cool looking, low-cost devices coming out of Asian manufacturers.

How do you feel about the wireless industry’s reception of this technology? Are you pleased with the players that have jumped on board? Any surprises?
I think originally the debate was between the traditional GSM, you know, 3G value chain, and really this a new value chain. But I would really say that the value chain closely resembles Wi-Fi. And so if you look in the starting days, you know, three years ago, there were companies on the infrastructure side that weren’t highly successful in 3G that jumped onto the WiMAX bandwagon. But all along, the Wi-Fi, silicon and device industry was always rather enthused with WiMAX because they felt like there were many variables of adoption on the 3G side in terms of devices. So that’s the early phase. I think where we’re at today, I think the whole industry has matured, I think the debates have matured, I think that people are accepting that WiMAX is here. Now the question is: What’s the relative share of the industry that WiMAX will get in terms of comparing it to overall wireless?

Has the industry been too quick to judge the viability of WiMAX? Or is it just a reaction to all the hype and attention it has been receiving of late?
I think the enemy of WiMAX is the industry itself. I think there are a lot of companies that tend to over-promote the technology, maybe the timing. I think the timing is on track and accelerated compared to any other wireless-like, complex kind of systems that get created. I really believe that the 3G naysayers in that debate will subside over time.

Do you think the ecosystem around WiMAX is growing efficiently enough to meet the list of promises its backers aim to deliver?
If you went back four years and I reflect on where I was starting from, I was really doing my best to try to convince big, base-station vendors to invest in WiMAX, and then that flipped. And then we went to silicon and device vendors. I really believe that the investment level in WiMAX, in the value chain and the ecosystem, is its most compelling piece. I think the challenge is the fact that, for the first time, we’re building an entire system out of many horizontal ingredients that all kind of need to work together, and the simpler we make that solution set beyond just basic interoperability, the more successful the whole industry’s going to be going forward.

WiMAX has been billed as a much cheaper alternative to other technologies? Why is that?
I think there are two driving forces. I think you’ve got to look at it from an infrastructure side and a device side. On the infrastructure side, really, WiMAX is getting benefit from the fact that the industry has matured. And regardless of technology, the types of base stations, the type of smart antenna systems you get, are really built on much further cost reduction than, say, the 3Gera architectures. So WiMAX is really getting the benefit of time on infrastructure, but it’s not necessarily WiMAX itself that’s enabling that. On the device side there are huge benefits. I always use the example, if you look at a 3G data card that will go into a laptop, that data card is roughly $150 to $200. Many people would say ‘well that’s a good price.’ But you don’t get the attach rate of that technology into high volume onto consumer electronic devices if the technology’s that expensive. And we believe that WiMAX is closer to Wi-Fi in its cost structure. And the equivalent Wi-Fi type of card is really a sub-$50. When you get into that lower price point from an end-user perspective, you start to see the attach rates in technology go up very high.

What about WiMAX makes the business model so different from traditional wireless services?
I think it really is about the value chain and devices. If you assume that the mobile Internet is really the application and that . the experience you have at home is the experience you want to have on the go, then any network or technology should be able to enable that. But WiMAX is actually going into networks that have bigger channels and more spectrum than traditional 3G, and that gives us the performance to deliver that home experience. And then the other big benefit is this whole embedded device kind of value chain, the cross structure of the value chain.

What would you say is the single greatest attribute of this technology?
It’s not the technology, it’s actually the cost point in devices that’s going to be the biggest attribute.

What challenges worry you the most with WiMAX?
We’re seeing that results in the air interface are pleasing us and, matter of fact, to some extent exceeding our estimates. At Clearwire I think we adopt maybe more of a Missouri show-me attitude in terms of how we gauge acceptance and what we want to put in the market. . However, as we look forward I think the complexity around getting interoperability done and as time moves forward the sort of allure of adding new things that are typically software-related to finishing the interoperability recipe, that’s the biggest challenge right now that the industry’s facing.

About six weeks ago a couple of sources told me Clearwire made a deal to bring the former Amp’d content team on board to lead a new content offering under the Clearwire brand. Can you talk about that move as it fits into your overall strategy?
Well, first off we don’t comment on any future business areas that we haven’t fully commercialized. So, no comment.

Many have said the delivery of rich media and entertainment via WiMAX will go a long way in convincing consumers and naysayers of its potential. Is there any particular application or service that you believe will drive the adoption of WiMAX?
I actually think that the Web applications that you use at home will drive demand. Within Clearwire, I think we’re uniquely looking at the application of video on the network and video content, as well as voice, as two areas that we think we can differentiate our services. At the end of the day, the user is just demanding a better Internet experience and a mobile experience, and that’s what we want to support.

It sounds like Clearwire plans to eventually launch an MVNO-like business with handsets.
Can you talk about future plans with mobile devices?
Again, we typically don’t comment on future business strategies. However, you will see that in the announcement we have with Sprint, which is a pending deal, we have an option to look at delivering MVNO-type of services based on their CDMA network.