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Sprint Looking To Divest WiMax Business

Sprint's acting CEO Paul Saleh told investors that Sprint is seriously considering selling its stake in the WiMax network it has been building. This could be a deathblow for WiMax's future. At least for the short term. And it would leave Sprint without a 4G strategy.

Ever since former CEO Gary Foresee's departure, one of the biggest questions on the minds of Sprint investors and others has been on the future of Sprint's planned WiMax build-out. It has been on shaky ground over the last month, though Saleh has on several occasions said that Sprint remains committed to WiMax. Now it looks as if Sprint might be kicking WiMax to the curb.

Sprint and Clearwire recently put the kibosh on plans the two companies had drawn up to cover more than 100 million people with WiMax. The companies had never signed a definitive agreement, and mounting pressure from Sprint's investors was just one reason that led to the annulment of the agreement.

Saleh reiterated to the investors that Sprint is mulling its options, but has a team studying the idea of a sale. What company or entity Sprint would sell its WiMax network to is unknown. Such a move would have several large consequences.

First and foremost, the likelihood of a nationwide WiMax network getting off the ground will go down significantly. Without major backers by companies such as Sprint, WiMax is more likely to be limited to regional deployments.

Secondly, WiMax's backers, such as Intel, Samsung, Motorola, and Nokia, could eat some serious losses.

Third, and most important, this would leave Sprint without a 4G strategy. It would have to make a clear choice on its 4G plans quickly. Verizon just announced last week that is has chosen LTE for its 4G road map, and AT&T is likely headed in that same direction. Would it be wise of Sprint to stay with CDMA-based technologies and side with Qualcomm's UMB technology? Even though we're speaking of technologies that won't be deployed for years, it would be dangerous for Sprint to be the lone supporter of UMB.

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