The WiMAX buildout took somewhat of a setback today, when Sprint Nextel (S) and Clearwire (CLWR) decide to not pursue their plans for joint development of a nationwide WiMAX network. The Wall Street Journal reports that the reasons for dropping the plan are “the complexities of the transaction and the departure last month of (Sprint CEO) Gary Forsee.”
The two companies were hoping to develop a network with extensive roaming agreements. Wall Street had initially welcomed the idea, but when Sprint hit the skids, investors started wondering if the two companies should merge their WiMAX operations and spin it off as a separate company. Maybe this opens up avenues for a separate company all together.
However, for now the deployment of WiMAX in the US faces some challenges. Two rival nationwide WiMAX networks are going to be cost a lot, and add financial strain to both the companies. This development is not such good news for WiMAX backers such as Motorola (MOT) and Intel (INTC). In sharp contrast to the US, WiMAX is gathering momentum in overseas, especially in emerging economies.
8 trackbacks so far
8:28 AM PT
[...] Read [...]
9:24 PM PT
[...] talk: Wired says there are some doubts about WiMax now that the deal fell through. GigaOm thinks there are some problems in the future for WiMax to overcome. BloggingStocks says this is just bad news for the companies and for the technology. Blandin on [...]
7:00 AM PT
[...] a highway from hell. The exit of CEO Gary Forsee, questions about its plans for a WiMAX network and its aborted partnership with Clearwire (CLWR) have provided fertile ground for all sorts of rumors. Rich Tehrani reports on one [...]
12:24 PM PT
[...] What is the promise of WiMax? Will the licensed spectrum - Sprint’s 2.5 GHz, Clearwire’s 2.5 GHz, AT&T’s 2.3 GHz, AWS 1.7 GHz & 2.1 GHz, and 700 MHz - all be deployed as WiMax? Telephony Online has an opinion. BTW, Sprint and Clearwire called off the partnership due to irreconcilable differences. [source] [...]
8:40 PM PT
[...] In the meantime, WiMAX is progressing nicely overseas, proving that they technology is valid and workable. Via [gigaom.com] [...]
1:04 PM PT
[...] says that Sprint Nextel and Clearwire may be trying to find new financing to revive their proposed WiMax joint venture. While such an effort would no doubt be a positive for the nascent wireless technology (especially [...]
4:56 AM PT
[...] seen its shares plummet in recent months. The two companies were contemplating a joint venture but then dropped the idea. I proposed perhaps Silicon Valley companies could get Sprint to spin-off its WiMAX business, and [...]
5:55 PM PT
[...] seen its shares plummet in recent months. The two companies were contemplating a joint venture but then dropped the idea. I proposed perhaps Silicon Valley companies could get Sprint to spin off its WiMAX business, and [...]
1 comment so far
2:49 PM PT
No way Sprint and Clearwire are going to build rival networks. They’re just going back to the old plan of “let’s call it a coincidence that we never seem to buildout the same markets.” Then, when the numbers look more attractive/mood changes on Wall Street, the hookup will be back on. We’ve seen this plenty of times before in telecom. No doubt that WiMAX should be a separate company though, as legacy Sprint networks will just drag the whole thing down. Can McCaw raise the money for Clearwire to buy out Sprint? The end game being, of course, that Sprint eventually buys back the whole enchilada at a nice profit to McCaw and friends.
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