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Sprint, Clearwire Fail To Forge WiMax Partnership, Nix Plans

Sprint and Clearwire cited several reasons for putting the kibosh on the two companies' planned WiMax network venture. Among them, last month's departure of Sprint CEO Gary Foresee and the overall complexities of wrangling out the details. Is this a deathblow for WiMax or just a temporary setback?

This is definitely not good news, that's for sure. If Clearwire and Sprint had been able to work things out, it could have provided a large WiMax network blanketing some 100 million people across the country. Under the original terms of the letter of intent signed by the two companies back in July, each would have put up networks in certain swaths of the country and permitted cross-roaming rights to the other's customers. This would have enabled to two companies to share resources, cut down on costs, and speed up the time of deployment. Now that is all in flux.

Despite this setback, Sprint's temporary CEO Paul Saleh said the company is still committed to WiMax. To what extent is not sure, but Sprint has recently mentioned that it is on track to launch its test WiMax networks by the end of this year, and expects the service to go live by mid 2008.

There was no word from Clearwire on what its immediate plans are. The news is worse for Clearwire than Sprint, as WiMax is at the heart of Clearwire's business. If the WiMax network venture fails completely for Sprint, it will certainly take a huge loss, but it can always fall back on its cellular business. Clearwire doesn't have such safety netting backing it up.

It also goes without saying that the stakes here are pretty big. A lot of companies have invested a lot of money in the hoped-for success of WiMax. The biggest of which include Intel, Motorola, Nokia, and Samsung. All of them will take it on the chin a bit if Sprint and Cleariwre's WiMax plans fall apart completely.

I am hopeful that Sprint will push forward on its own. I think WiMax is an important technology and could serve many purposes (perhaps as the successor to failed muni-Wi-Fi attempts?). Even if the eventual roll-out is slower than originally planned, getting the test markets up and running is a critical first step. Before it takes that step, however, Sprint needs to bring a new leader on board who can set the ship aright.

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