Thursday, November 8, 2007

Sprint Nextel Terminates Clearwire Deal, Reviews WiMAX Rollout Plans

Sprint Nextel and Clearwire terminated their agreement signed in July 2007 to jointly build a nationwide mobile broadband network using WiMAX technology and to promote the global development of WiMAX-based services. The partnership aimed at reducing the cost of network construction and at accelerating the rollout of a nationwide 4G service. The two companies said they could not resolve complexities associated with the deal and failed to reach final agreement on the terms of the transaction.

Sprint remains fully committed to developing WiMAX services and deploying a WiMAX network. However, the company said it is reviewing its WiMAX business plans and outlook and expects to comment further on these topics early next year.

"We are on track for soft launch late this year in the Chicago and Baltimore/Washington markets and commercial launch in 2008," said Keith Cowan, Sprint's president of Strategic Planning and Corporate Initiatives. "In line with Sprint's mandate of improving the customers experience and simplifying our operations, we look forward to working with Clearwire on opportunities such as roaming and standards."

  • Under the WiMAX partnership announced in July 2007, Sprint Nextel was to focus its efforts primarily on geographic areas covering approximately 185 million people, including 75 percent of the people located in the 50 largest markets, while Clearwire was to focus on areas covering approximately 115 million people. Initially, the two companies were aiming to build out network coverage to approximately 100 million people by the end of 2008, with seamless roaming enabled between the deployed areas. The arrangement also contemplated the exchange of spectrum between Sprint Nextel and Clearwire to enable each company to build out its portion of the network and to enhance service in its build-out territory, as well as for the exchange of other assets associated with this spectrum. In addition, Clearwire was to be given the ability to utilize certain Sprint Nextel 3G infrastructure.

  • In October 2007, Gary Forsee resigned as Sprint Nextel's chairman, president and CEO. A search is underway for a replacement. Sprint Nextel also announced weaker than expected financial results and a net loss of post-paid mobile subscribers during Q3.

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