Sprint Drops Plans to Partner with Clearwire on WiMAX
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Sprint Nextel has called off its partnership with wireless Internet provider Clearwire, casting into doubt the future of Sprint's planned national WiMAX service rollout.
"We were going to work together [with Clearwire]to build a joint network, but there were business complexities we couldn't resolve," Sprint spokesman James Fisher said. He did not elaborate.
Fisher did say that the company will continue moving forward with its "soft rollout" of WiMAX services in Chicago and Baltimore, set for later this year, and still plans a national rollout of the service for 2008.
"We'll be looking at the details of our path going forward, and getting back to Wall Street and others with our plan early next year," he said. "We need to re-evaluate our plans."
The decision comes as Sprint continues it search for a CEO following the September resignation of former chief executive Gary Forsee. Forsee had had been largely responsible for the company's ambitious WiMAX plans, which entailed a massive $3 billion investment in the technology through 2008.
Clearwire provided a bit more detail during its quarterly results announcement today, describing the joint effort with Sprint being abandoned because it "was likely to introduce a level of additional complexity to each party's business that would be inconsistent with each company's focus on simplicity and the customer experience."
Monica Paolini, the founder and president of wireless consulting firm Senza Fili Consulting, said the news bodes poorly for Sprint's national WiMAX ambitions.
"It was obviously a complex type of agreement, but one that would have given them a lot of savings," she said. "I think that we're going to have some uncertainty for some time."
"It's not very good news, especially because I think there might be more coming, and not necessarily positive," she added.
The dissolution of the two companies' current partnership might not meant the end of some level of collaboration between Sprint and Clearwire, however. In its earnings statement, Clearwire said that "discussions continue regarding the best means to accomplish the benefits that were expected under the letter of intent."
A spokesperson for the company declined to comment further.
While Sprint seems likely to continue to discuss ways to work with Clearwire, it's not certain that those talks will yield any results, she added.
Paolini said she believes the two will collaborate at least at for a roaming agreement if it still hopes to complete its national rollout next year.
"It's not like there are many other options out there," she said. "Sprint and Clearwire's spectrum footprints are perfectly complementary. It looks like cooperation at some level is going to be beneficial to both. If [Sprint] didn't [reach a roaming agreement], that would be quite troublesome."