Sprint Nextel is bracing for another hit, this time from Fitch Ratings, which rates companies' credit worthiness. In addition to Sprint's oft-cited challenge to deploy WiMax, Fitch indicated it is concerned about the mobile phone service provider's lagging effort to switch subscribers from Nextel's iDEN network to Sprint's CDMA network.

In a statement released Tuesday, Fitch said it "believes the company faces significant technology and execution risk surrounding the migration of its iDEN subscriber base to CDMA and the implementation of its WiMax strategy."

When Sprint acquired Nextel in 2004, the new merged company sang the praises of the Nextel spectrum and how it was a valuable asset. While Nextel's spectrum has indeed been valuable, the downside of moving public safety groups like fire and police departments off it has become more onerous than expected.

The FCC has taken notice; last month the agency told Sprint it must accelerate the shift out of iDEN infrastructure. Initially Sprint said it could accomplish the task of shifting users from the iDEN band for $2.8 billion, but that figure seems like a mirage as the costs pile up.

Sprint has said that it has removed most of its signals from the public safety bands, but it has run into difficulty in relocating public safety organizations to substitute infrastructure that works properly.

Sprint took note of the problem in a statement this week in which it cited various situations, including "the impact of adverse network performance ... resulting from reduced network capacity and other adverse impacts resulting from the reconfiguration of the 800 megahertz, or MHz, band used to operate our iDEN network."

As for WiMax, Fitch said Sprint will have to spend "several billion dollars in investment as well as the incurrence of significant start-up operating losses" deploying the wide area wireless technology. WiMax is being deployed in spots in the United States and the technology hasn't even been certified by the WiMax Forum; it is expected to ultimately be successful and in widespread use, but the cost and timetable are constantly lengthening.

Fitch also said Sprint's recent announcements highlight additional challenges faced by the mobile phone provider, including subscriber additions and churn. The credit rating operation noted some Sprint strengths, including its "considerable scale" and the fact that it "generates significant cash flow." Fitch added: "Sprint Nextel's liquidity position is sufficient given its cash position, free cash flow, and available draw under its credit facility." Fitch noted that Sprint had $1.7 billion in cash at the end of the second quarter of 2007.