Sprint Might Spin Off WiMax. Does This Mean Sprint Has Second Thoughts?

According to an <a href="http://online.wsj.com/article/SB118177984718034661-search.html?KEYWORDS=sprint&COLLECTION=wsjie/6month">article</a> in the <em>Wall Street Journal</em>, Sprint might spin off its <a href="http://www.techweb.com/encyclopedia/defineterm.jhtml?term=WiMax&x=0&y=0">WiMax</a> unit. The spinoff could be part of a deal to form a joint venture with <a href="http://www.informationweek.com/blog/main/archives/2007/03/did_clearwire_r.html">Craig McCaw's Clearwire</a>, which currently

Stephen Wellman, Contributor

June 14, 2007

2 Min Read

According to an article in the Wall Street Journal, Sprint might spin off its WiMax unit. The spinoff could be part of a deal to form a joint venture with Craig McCaw's Clearwire, which currently has about 258,000 fixed WiMax customers in 38 U.S. markets. Would a spinoff mean that Sprint doesn't really believe in WiMax?It sure looks like that to me. WiMax advocates have long singled Sprint out as the hero on a white horse, the service provider willing to put this technology at the center of its future.

Why would a carrier want to spinoff the very technology many claim will be the future of wireless? Wouldn't they want that network at the center of their business?

Om Malik shares some of my skepticism too:

Still, this proposal makes most sense when compared to the Clearwire option. Sprint, which plans to spend $3 billion or so on the WiMAX network has been hammered on the stock markets, though the stock price declines have nothing to do with WiMAX. Instead, Sprint's misfortunes are directly correlated with massive churn in its cellular customer base. Sprint Nextel's postpaid gross additions fell 12% in the first quarter, and revenue grew a meagre 5% - leaving investors disatisfied.

He cautions this may be more of an attempt by Sprint to placate Wall Street. I don't know if I buy this.

Another possibility is that mobile WiMax isn't going as well as we've been told. Could this be a way for Sprint to make a graceful exit from WiMax? Or at least a way to create some distance from it?

Of course, there is no JV yet, but if this goes off, I think this could be a sign that Sprint doesn't see WiMax living up to its full potential.

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