honoluluadvertiser.com

Sponsored by:

Comment, blog & share photos

Log in | Become a member
The Honolulu Advertiser
Posted on: Saturday, November 10, 2007

Sprint WiMax deal with Clearwire falls through

By Kim Hart
Washington Post

WASHINGTON — Sprint Nextel and Clearwire said yesterday they are calling off their joint plan to build a national high-speed wireless network using WiMax technology, dealing another blow to Sprint as it struggles to regain its footing.

Sprint, based in suburban Reston, Va., has pitched WiMax as core to its strategy, touting it as a way to let customers surf the Internet on laptops, cell phones and other portable devices at speeds up to five times faster than current cellular networks.

In a statement, it said it is reviewing its WiMax business plans, though it "remains fully committed" to the technology and is on track to make it available in Washington, Baltimore and Chicago by yearend.

The decision to cancel the partnership comes a month after Sprint Chairman and Chief Executive Gary Forsee resigned under pressure from board members and investors. Sprint, the country's third-largest wireless carrier, has lost more than a million subscribers over the past year as it struggles to fix network and customer service problems.

Sprint and Clearwire signed a letter of intent in July to pool their resources to build the WiMax network, but the project fell behind schedule when an official deal was not finalized. The companies could not resolve the "complexities," Sprint said.

Sprint said it expects to collaborate with Clearwire on other WiMax opportunities, such as roaming on each other's network.

Forsee's $5 billion gamble on WiMax was harshly criticized by analysts and investors. The technology is considered risky because it has never been used to build a mobile network.

WiMax works similarly to WiFi, which allows people to surf the Internet when they are within several feet of transmitters. WiMax extends that service for miles.

Clearwire's shares fell 25 percent yesterday to close at $13.49 after the announcement. Sprint shares closed at $16.31, down 1.39 percent.