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It’s time to ask the question after the resignation this afternoon of Gary Forsee as chairman and CEO of Sprint Nextel: What becomes of WiMax? Sprint Nextel’s giant leap and giant spectrum holdings led to Intel, Motorola, and Samsung committing to technology previously only on the roadmap in the U.S. of startup Clearwire. Forsee certainly led the move into WiMax as Sprint’s 4G technology of choice. With his departure, prompted by shareholder complaints in the face of subscriber defections, lackluster revenue, and a long wait for a payoff of the current plans, will WiMax survive on the chopping block?
Sprint conceivably owns several billion dollars worth of 2.5 GHz licenses. I’m not sure how they’re valued in the current marketplace nor how freely transferrable most licenses are. Because Sprint acquired most of its licenses outside of the educational market, they may have substantially fewer constraints on transferring them.
The company is still coping with the ongoing liabilities associated with sorting out their scattered spectrum holdings that Nextel pledged to pull together to create contiguous ranges for public safety. That’s in disarray, with costs far higher than anticipated, and Sprint Nextel holding firm and delaying plans.
If Sprint focused on its partnership with cell companies, recommitted to the EVDO 3G to 4G roadmap, and sold its 2.5 GHz holdings, perhaps that would satisfy investors and put them back on the map as a competitor. But it’s hard for me to see the advantage. Who would buy the holdings? Another carrier, ostensibly. Clearwire has $1b in the bank, hardly enough to buy all of Sprint’s licenses. (Clearwire and Sprint are past the 90 days predicted to finalize their complementary network and roaming deal, too.)
Posted by Glennf at October 8, 2007 3:35 PM