with Teresa Elder, president of strategic partnerships and wholesale at Clearwire
As president of Clearwire's strategic partnerships and wholesale, Teresa Elder is tasked with managing the company's existing wholesale partners (Comcast, Time Warner, BrightHouse and Sprint) while also being on the lookout for new players. This daunting role means that Elder must understand the intricacies of Clearwire's IP-based WiMAX network and also know how to navigate the complexities of the cable industry, the cellular industry and any other industry that Clearwire enlists as part of its wholesale partner agenda. Elder, a former Vodafone executive, was recruited by fellow Vodafone alumni Bill Morrow, now CEO of Clearwire, last August to head up this area of Clearwire's business. Elder recently spoke with FierceWireless Editor in Chief Sue Marek about the company's wholesale strategy.
FierceWireless: You worked for AT&T Broadband, which is now Comcast. How has that experience helped you in your job at Clearwire?
Elder: My background is in both wireless and cable. There are similarities in the industries but they have their own personalities and priorities. I think being able to speak to both has been helpful in understanding how wireless can fit into the next step for the cable industry. Also just understanding how they operate.
FierceWireless: What is the biggest difference between the two industries?
Elder: They don't have the competition with other cable companies but certainly the cable industry is extremely competitive when you look at Fios and Uverse and the satellite providers for their core video product and their high-speed data product with the traditional telephone company. They have competition coming from a number of different places.
Both industries are competitive. Both are network businesses that really rely on having an ongoing relationship with customers. How you enhance that relationship and managing the customers needs as they evolve with a new technology are very similar. That's why Clearwire was attractive to me. It had both cable partners as well as wireless.
FierceWireless: What types of companies do you think will make the best partners for Clearwire? What do you look for when you are considering new partners?
Elder: To the first part of the question--we are absolutely delighted with the partners that we have that also happen to be investors in our company. Our partners Comcast, Time Warner, BrightHouse, Sprint, and of course, our relationships with Intel and Google are fantastic. The wholesale relationships we have with Sprint, Time Warner and Comcast have been mutually beneficial to us.
Those partners give us access to their current base of 100 million customers. We are in a strategic place where both Sprint and the cable companies want to add this high speed mobile service through our 4G network to what they are doing. It's a very positive marriage that has taken place.
Our first priority in my wholesale organization that we have been launching since last fall is to make sure that we work with our current partners and make them very successful.
The next step is to grow the base of additional wholesale partners. There are a wide variety of possible partners. It could be additional wireless providers and cable companies--that is the obvious choice--but also some less obvious ones such as consumer electronics companies, retailers and CLECs. There are a host of companies that are excited about what we are doing with this shiny new open 4G network.
FierceWireless: I think it would be difficult to balance your partners' interests with Clearwire's interests. In a lot of ways you could be competing with the same customers. Your different partners may be competing with the same customers. I expect this will happen as the market becomes more mature.
Elder: We haven't had issues with that. We really have partners that address different target segments. For example, the cable companies are looking for something that is addition to the suite of offerings they already have. They have the customers that already use their high-speed Internet at home and then want to extend the relationship past the front door, such as the suite of Comcast services. This allows them to have that high definition video content and this product. They want something in addition to what they have at home.
Then we have Sprint that has its traditional base of wireless customers that have a 3G smartphone or data card and now they are going to upgrade with this fast 4G service. This is the next step in that evolution.
The other thing is this is a high-growth part of the industry and there is still plenty of untapped potential.
FierceWireless: Is it important that future partners are investors too?
Elder: We are open to that but it is not necessarily a requirement. We are open for business as a wholesale business. We wholesale our services to partners that don't necessarily have to be investors.
FierceWireless: Sprint tried a similar strategy six years ago with its MVNO partners--Virgin Mobile, Helio, Disney Mobile and others. It's hard to not compare this to what Sprint did and we've seen what happened--many of those partners didn't make it. How will you prevent that same scenario from happening again?
Elder: That isn't a concern. We have this network with this enviable spectrum position that allows us the capacity to bring on several partners and it is definitely a value to our partners' businesses to have this, and it's of value to us to fill up the network with quality partners. I'm not worried about that.
I used to work at Vodafone, so I'm very familiar with what has worked well and what has not worked well with MVNO partners around the world. We look at best practices and the mix and how you manage this very well. I think that so far so good. We feel great about the group of partners we have today and those that could come onboard in the future.
FierceWireless: How many wholesale partners will you have? Or perhaps the question should be, how many wholesale partners do you want?
Elder: That's a great question. We have been having some great conversations with a lot of potential partners. We aren't having any problems generating interest. It's less about the number of partners as it is the mix and the kind of volume--either subscribers or usage that they bring to the network. Not all partners are created equal.
The other thing is that when you are starting to look at data vs. a voice MVNO--voice is very different from what we are doing. We have a network that was built for data first. It's all IP. Because I've been at AT&T and Vodafone I know what it's like to have a voice network that you are trying to add data too. It's different having a greenfield network that is built for data.
FierceWireless: I understand you have open capacity, but we have seen how quickly people are using that capacity. I think we may be surprised by how much bandwidth can be used--what if everyone starts using video apps? What are you doing to manage that?
Elder: Absolutely and that's why the mix of partners is so important. If there are devices that are machine-to-machine opportunities that uploads data in the middle of the night--so there are ways to fill the network up in different times of the day. Clearly the video gamers have maybe a different profile than business people who use their data at certain times.
I think some of the models that we have seen in the past for filling up networks that are voice-based and different with data. And I think one reason I was so attracted to Clearwire is the design of the network and the spectrum that we have in the top 100 cities, we have capacity that we can add at an economical rate. That is very appealing to our partners. That is where this model works extremely well.
FierceWireless: How tied are you to your partners' success? How involved are you in their business model to make sure they will be a success?
Elder: We want partners that are going to be successful so we look at their plan and what they want to do where and how that fits with our roadmap. That is all considered when we are talking with prospective partners. We also work closely with our existing partners to make sure we are helping them get to where they are going.
FierceWireless: Are potential partners still waiting for Clearwire to get more of a footprint with your WiMAX network?
Elder: I think we now have 41 million POPs covered so we are getting to the point where this is less of an issue. Last fall it was a bigger deal. People now see we are launching markets and bringing on customers that are happy. Those question marks are starting to go away.
Cable operators don't care so much about POPs covered as long as you are in markets where they offer service.
FierceWireless: What is the biggest concern you have?
Elder: Scaling this business fast enough. We are growing so quickly, I want to make sure we are taking care of our current partners and providing what we need to our prospective partners. Keeping up with the incredible pace of this business and scaling is critical so we can keep our partners happy.