Sprint considers shift in WiMax strategy
Sprint Nextel may be considering some big changes to its WiMax strategy, which might include a merger with start-up service provider Clearwire, according to a story in The Wall Street Journal on Friday.
Sprint Nextel is supposedly weighing its options on the matter as it looks for a new CEO, the article said. The company's former CEO Gary Forsee was forced out of the company last month. Sprint, the third largest wireless operator in the United States behind AT&T and Verizon Wireless, has been bleeding customers for the past few quarters as it deals with integrating the old Nextel customers into its network. For the third quarter of 2007, the company said it lost 337,000 subscribers to its postpaid monthly service.
But despite these problems, the company has been pushing forward with a new wireless initiative to build a fourth-generation wireless network using a technology called WiMax, which is designed to provide service over relatively long distances. The new network, which is set for a soft launch in Chicago, Baltimore, and Washington, D.C., within the next few months, will cost the company $5 billion.
This summer Sprint teamed up with Clearwire, a start-up founded by wireless-services mogul Craig McCaw, to build the network nationwide.
Sprint's acting CEO, Paul Saleh, who also happens to be the chief financial officer, told The Journal that the company is facing some "pressing strategic questions, including the fate of its WiMax project." Many Wall Street analysts believe that Sprint's Wimax plans are distracting the company from fixing the problems in its core business. And they have been pressing the company shift gears on its WiMax plans.
Citing sources close to the company, The Journal said that Sprint is considering a merger with Clearwire and an eventual spin-off of the business unit that could lead to an initial public offering of the business unit.
Meanwhile, there's also been talk that Sprint is in discussions with Google to use its upcoming mobile operating system on some Sprint phones.
Marguerite Reardon has been a CNET News reporter since 2004, covering cell phone services, broadband, citywide Wi-Fi, the Net neutrality debate, as well as the ongoing consolidation of the phone companies. E-mail Maggie.
