Sprint Ends Clearwire Partnership, Still Plans WiMax RolloutSprint Ends Clearwire Partnership, Still Plans WiMax Rollout

Sprint Nextel and Clearwire scuttled their WiMax agreement Friday, but both companies said they would independently continue their WiMax projects.

However, both hedged their future plans as Sprint said it would review its WiMax plans early next year, and Clearwire said it would move ahead on its plans to deploy Mobile WiMax, but the technology "may never be developed to our satisfaction or at all."

Sprint and Clearwire had agreed last July to pool their WiMax efforts to offer the wide area wireless broadband technology to 100 million people. But the deal lost momentum when former Sprint CEO Gary Forsee resigned under pressure in September. Forsee had said Sprint was planning to invest $5 billion in WiMax by 2010.

In ending the partnership, Sprint said the companies "could not resolve complexities associated with the [letter of intent] and failed to reach final agreement on the terms of the transaction."

Sprint's VP of technology development Ali Tabassi said last week in an interview and at a trade show in Boston that the company was committed to WiMax, and he laid out an ambitious rollout schedule. And in Friday's announcement, the cell phone service provider said it remained on track for a "soft launch" of its WiMax service in the Chicago and Baltimore/Washington markets and for a commercial launch of the service next year.

Nonetheless, Sprint appeared to be hedging its WiMax bet -- possibly to wait for direction from a new CEO, still to be hired -- as it stated in a release: "Sprint is reviewing its WiMax business plans and outlook, and the company expects to comment further on these topics early next year."

Sprint's major partners in the WiMax rollout include Intel, Motorola, Nokia, and Samsung. Earlier this week, Sprint participated in Google's Android announcement of a new mobile phone platform; previously Sprint indicated that various Google features would be available for its WiMax subscribers.

In addition to the challenge of deploying WiMax, Sprint is rolling out an ambitious 3G CDMA2000 nationwide network. It also has been losing subscribers at a high rate, most of them Nextel users. Earlier this week, Sprint unveiled a plan designed to improve its customer service and slow subscriber defections.

In reporting its third quarter results Friday, Clearwire said it added 49,000 net new subscribers, bringing its total subscriber base to 348,000. The company also said it had launched wireless broadband service in four new U.S. communities and in Seville, Spain. Clearwire said it was still committed to its WiMax deployment and "contemplates" migrating its current fixed wireless subscribers to mobile WiMax if and when that technology is ready.

Clearwire said it lost $329 million in the third quarter, versus a loss of $60 million in the third quarter of 2006.