Sprint Considering Changing Course on WiMax

Rumors surface that nation's third largest wireless carrier may spinoff its 4G broadband plans.

Sprint Nextel's $5 billion WiMax plans appear to be in flux.

After staking out a claim on WiMax as its technology of the future in August 2006, and announcing a tentative WiMax partnership with Clearwire a year later, Sprint is now considering alternatives.

Among the Sprint's options, according to the Wall Street Journal, is merging Sprint's WiMax unit with Clearwire and then spinning off the entity as an IPO (initial public offering). Other options might include seeking a strategic investor for the WiMax unit or acquiring Clearwire outright.

Since announcing its ambitious WiMax plans, investors have questioned Sprint's commitment to its core wireless business, where Sprint, of Reston, Va., is the nation's number three carrier. WiMax is a broadband technology with the potential to transmit data over significant distances and through a number of different means, such as point-to-point links.

Click here to read more about why Sprint wanted to continue to develop WiMax network despite the departure of CEO Gary Forsee.

"We will have 100 million covered by the end of 2008 and be in 35 markets," Sprint Chief Technology Officer Barry West proclaimed in August at NXTcomm. "We're soft launching in Washington and Chicago in December and launching commercially in April of 2008."

West contended the killer app for WiMax will be broadband. Today, most Americans get their broadband through DSL or cable connections. "Today eyeballs get to the Web over DSL and cable," West said. "When we have a real WiMax network it will be over that network."

Since then, though, Sprint CEO Gary Forsee, a strong supporter of the company's WiMax strategy, has left the company and Sprint is still searching for a new leader.According to the Wall Street Journal article, Sprint would not merge or buy Clearwire, of Kirkland, Wash., or consider a spin off until after a new CEO is selected.

Selling or spinning off its WiMax properties would satisfy skeptical Sprint investors while providing supporters of WiMax a venue for investment.

Neither Sprint nor Clearwire, founded by cellular pioneer Craig McCaw, had any comment on the article.

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