Report: Sprint & Clearwire Split
According to sources cited by the Wall Street Journal, the agreement the pair struck in July this year has been scrapped for two main reasons -- the departure of Sprint CEO Gary Forsee, and the complexity of the joint WiMax rollout deal. (See Sprint Nextel CEO Steps Down and Clearwire & Sprint Team on WiMax.)
Rumors have swirled around Sprint's WiMax plans since Forsee's departure, which was due in part to the expense of deploying the new wireless broadband technology. Sprint was planning to spend billions of dollars on rolling out WiMax in the coming years: The Clearwire agreement was supposed to reduce capital and operating expenses connected with the new network.
If the two companies have indeed abandoned their joint plans, further doubts will be cast on the likelihood of a nationwide WiMax rollout by either Clearwire or Sprint. Industry commentators have already speculated that Sprint might spin off the "Xohm" WiMax service. (See What Now for Sprint?, Sprint Promises WiMax 'Momentum', and Sprint's Ready to XOHM Out.)
Clearwire will likely need even more cash for WiMax if the pact is off. Early this month, Clearwire bumped up its aggregate loans to $1.25 billion to "to further support its expansion plans, spectrum acquisitions and for general corporate purposes." Bear Stearns & Co. Inc. predicted in May that Clearwire would still need an extra $3.3 billion in funding to deploy WiMax.
This story will be updated as details emerge.
— Dan Jones, Site Editor, Unstrung