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Sprint Scraps Clearwire Partnership
Two companies couldn't come to an agreement...

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.


Though Sprint recently stated their Xohm plan was moving forward, it apparently won't be doing so with Clearwire. Sprint had previously planned to split their mobile WiMax network build with Clearwire 65/35, while allowing users to easily roam between the two networks.

Sprint is now saying the two companies could not agree to terms and have scrapped the deal. The company also says they're reviewing their mobile WiMax business plan as they search for a new CEO, but remains committed to the technology.

It's too early to start the funeral procession for Xohm, as the new CEO could come in and make any number of decisions, including spinning off the unit. It is however, very likely the company could scale back the ambitiousness of the project in order to appease nervous investors.

Meanwhile, Clearwire issued their third quarter earnings, which indicate they've hit the 348,000 fixed WiMax subscriber mark, their third-quarter net loss widened to $329 million and revenue jumped from $27 to $41 million.
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xenophon
join:2007-09-17

xenophon

Member

Affiliate like structure wouldn't work?

Not good overall but reading other tidbits about it, sounds like there were too many complexities to pull it off. But they will still target roaming on each other. The agreement would have made Clearwire more like a Sprint affiliate (like iPCS). It's back to becoming competing companies that roam on each other. Hopefully it will be as smooth as Alltel/Sprint EVDO roaming deal.

One lost opportunity is the swapping of spectrum, which had pluses and minuses. It would have given each over 100mhz spectrum in a market, but it would also mean giving up markets and dividing them between companies. That might have sounded good at a high level but sacrificing too much, especially for Sprint to give up entire markets to Clearwire. Sprint has 90mhz in most markets if I recall. I think Clearwire only has 20-30mhz in most.

Clearwire probably would have benefited more than Sprint, but Clearwire may not have wanted to be like an affiliate. Sprint only considered dividing the rollout with Clearwire to appease stockholders. Well the stockholders didn't buy into it anyway so they are moving along without needing that dependency.

An affiliate-like partnership would probably be better for end users, but maybe not good business in the end. They both know they still need each other for WiMAX to succeed.
tivoboy
join:2004-05-10
Menlo Park, CA

tivoboy

Member

Bad

Well, it looks like CLWR is about to drop 1 BILLION in market cap this morning. I would say, it that reaches 1.5 BILLION, then this could look like a power play. Scrap the deal, let the company die and then buy up the assets for .30$ on the dollar.

Sprint doesn't want to make friends, they just want to make MONEY!
SkiBumJ799
join:2007-02-02
Dallas, TX

SkiBumJ799

Member

Re: Bad

said by tivoboy:

Well, it looks like CLWR is about to drop 1 BILLION in market cap this morning. I would say, it that reaches 1.5 BILLION, then this could look like a power play. Scrap the deal, let the company die and then buy up the assets for .30$ on the dollar.

Sprint doesn't want to make friends, they just want to make MONEY!
looks like you might be right....

CLWR 14.46 -3.57 (-19.80%) Nov 9 9:40am ET

inteller
Sociopaths always win.
join:2003-12-08
Tulsa, OK

inteller

Member

I know what stock I'll be shorting today.

Thanks DSLR!

W4DRA
D a v e
join:2003-06-02
Dunnellon, FL

W4DRA

Member

Get the EVDO fixed first

I think that Sprint should get the EVDO for Mobile Broadband
working properly before they jump into the WiMax service.
Mine really stinks here. Speeds are all over the place.
For $59.95 a nonth its not any better than Wildblue or Hugesnet except when it rains real hard.

BillRoland
Premium Member
join:2001-01-21
Ocala, FL

BillRoland

Premium Member

Re: Get the EVDO fixed first

said by W4DRA:

I think that Sprint should get the EVDO for Mobile Broadband
working properly before they jump into the WiMax service.
Mine really stinks here. Speeds are all over the place.
For $59.95 a nonth its not any better than Wildblue or Hugesnet except when it rains real hard.
Interesting, you're in Dunnellon. I'm over in Ocala and we have the same stuff happening over here. 5:00pm and I get better speed on my iDEN phone!

Beburn
@rr.com

Beburn

Anon

Re: Get the EVDO fixed first

Down here in Belleview I get about 620 down
Test99
Premium Member
join:2003-04-24
San Jose, CA

Test99

Premium Member

Great News!

I think this is the best possible outcome for Sprint. ClearWire has earned a reputation for very poor customer service and for blocking services it doesn't like, such as VOIP.

It looked to me as if the ClearWire connection would do real damage to Xohm. Now there's hope for WiMax again.
ernliz
join:2001-11-25
Albemarle, NC

ernliz

Member

Re: Great News! -- Uh, not?

I just hope this deal (un-deal?) doesn't cause much harm to Clearwire's viability. Its service is a lifeline to many of us in the rurals who depend on it solely for any kind of broadband (other than the ridiculous satellite thing). Long live Clearwire, regardless of the corporate dances!

EW

Onthewayout
@bellsouth.net

Onthewayout

Anon

Meanwhile customers scrap Sprint

What a poorly run company! Counting down the days till Sprint spins off Nextel and Verizon buys the CDMA assets.
xenophon
join:2007-09-17

xenophon

Member

Re: Meanwhile customers scrap Sprint

Sprint is a $40B company, not exactly going away. It's the Nextel side that is losing customers. The churn rate of the CDMA side is below 1.6%, better than ATT.

Sprint needs to only sell CDMA/iDen combo phones to Nextel users, move as many as they can to CDMA in a year then shutdown the network and cut their losses. The could shrink by 5 million users and be a tighter, smaller company, then focus on wireless data services, which they are the best at.

tc1uscg
join:2005-03-09
Gulfport, MS

tc1uscg

Member

Re: Meanwhile customers scrap Sprint

said by xenophon:

Sprint is a $40B company, not exactly going away. It's the Nextel side that is losing customers. The churn rate of the CDMA side is below 1.6%, better than ATT.

Sprint needs to only sell CDMA/iDen combo phones to Nextel users, move as many as they can to CDMA in a year then shutdown the network and cut their losses. The could shrink by 5 million users and be a tighter, smaller company, then focus on wireless data services, which they are the best at.
Where's your data to back that up? Rather it's legacy nextel or Sprint customers hanging up on the company, all the morons on wall street, you know, the ones who gaze into a glass ball while sipping a cup of high octane java "guessing" at what to do with your money, they seem to thing all Sprint's customers are in ONE pot. So, rather the CDMA churn is lower then AT&T's, that's not how it's presented and the last time I looked, there's ONE system for both companies. No more NXEL. Nextel drops customers, it hurts Sprint as a whole. Your posts mean nothing to the markets and when it comes down to it, that's all that counts.