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Sprint Eyeing Xohm Spinoff
And possible Xohm merger with Clearwire...
by Karl Bode 08:54AM Friday Nov 02 2007
With the recent departure of Sprint CEO Gary Forsee, there was ample speculation that Sprint would put the brakes on Xohm -- Sprint's mobile WiMax service slated for launch next year (to the tune of $5 billion). The service, which will offer users 2-4Mbps wireless broadband for around $40-$50, was championed heavily by the now-departed CEO. As we saw with FiOS, investors are nervous about the heavy deployment costs and slow returns.


One solution that's been tossed around is that Sprint would spinoff Xohm and merge the unit with Clearwire, with the goal of dumping the capex requirement on Clearwire. Sprint had previously planned to split their mobile WiMax network build with Clearwire 65/35. The Wall Street Journal confirms that such a spinoff is on the table:
quote:
Now, Sprint's board is considering a number of options, including spinning off its WiMax unit and merging it with Mr. McCaw's company, with the resulting entity potentially going public. Other options for Sprint include trying to attract a strategic investor for its WiMax unit, acquiring Clearwire outright or formalizing the deal struck in July. Many of these options were considered in the companies' initial talks earlier this year.
Before Sprint makes a move, they're going to wait until a new CEO is in place, a process that could take several months.

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Go Tarheels
Premium
join:2006-01-05
Nashville, NC
kudos:1

I expected to see this

With investors wanting ROI every 3 months, this was destined to be doomed. My guess is that they will neglect their wireless internet (EVDO) infrastructure to try to resurrect their cell phone brand. I wouldn't be surprised to see a merger in the works with Verizon Wireless.

RadioDoc
Premium,ExMod 2000-03
join:2000-05-11
La Grange, IL
kudos:2

Re: I expected to see this

Sprint never goes the distance with these. See: Sprint Broadband Direct & ION among others.

No surprise. They're all talk.
--
Toolmaster of La Grange.

inteller
Sociopaths always win.

join:2003-12-08
Tulsa, OK

1 recommendation

the ghosts of Nextel are still here.

This just reinforces my stance that the Nextel debacle was the worst thing to ever happen to sprint. This is what happens when you mix two totally different shareholder bases together.

DaveDude
No Fear

join:1999-09-01
New Jersey
kudos:1

Sprint needs to follow Big Brother

With Verizon going LTE, it makes no sense Sprint going with Wimax. Sprint needs to copy Verizon, but offer lower cost plans.
xenophon

join:2007-09-17

1 edit

Re: Sprint needs to follow Big Brother

The open WiMAX business model makes way much more sense than closed LTE. WiMAX is targeted to consumer devices while LTE will be limited to phones and laptop cards.

Intel will be putting WiMAX in centrino chipsets. You can't buy a laptop w/out WiFi today and you won't be able to buy a laptop w/out WiFi/WiMAX in a year or two. This means it will be self-marketing for Sprint. They'd be nuts not to do WiMAX.

WiMAX will be on consumer products and people will be buying devices at Best Buy that will have WiFi/WiMAX chipsets built in and they won't even know it. They see a signal and sign up. Again, self-marketing for Sprint.

This won't happen with LTE. WiMAX is pro consumer and will be easy for existing WiFi product makers to jump into. LTE will maintain the telcom model with tight control by telcom companies. Consumer device makers don't want to deal with it.

The WiMAX business model is to Netflix and Redbox as LTE is to the old school video stores.

DaveDude
No Fear

join:1999-09-01
New Jersey
kudos:1

Re: Sprint needs to follow Big Brother

The technology isnt closed or open, its the business model. CDMA,and GSM are pretty much open. Both can use sim cards, and both dont need to locked down, its the providers that lock it down. Wimax has the same possibility of being locked down.
xenophon

join:2007-09-17

3 edits

Re: Sprint needs to follow Big Brother

said by DaveDude:

The technology isnt closed or open, its the business model.
EXACTLY. That's specifically what I've been talking about, the business model. I even stated that very specifically. WiMAX/LTE are pretty much the same technology.

You don't see CDMA/Edge, etc on various kinds of consumer products because the product makers would have to certify with carriers and the carriers want the control. The only reason you see EVDO built in some laptop makers is because the carriers are paying them megabucks to do so. The laptop makers wouldn't do it on their own. With WiFi/WiMAX chipsets inevitable, consumer product makers drop it in the product and don't have to hook up with the carriers for certification. WiMAX 'business model' is consumer friendly and consumer product friendly. LTE is all about carrier control.

Unlocks GSM devices are still under carrier control by the fact that you must put in a SIM card from a carrier. To say that WiMAX could be locked down is like saying WiFi devices could be locked down. Yeah, it's technically possible but it's not the business model.