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The Wall Street Journal reports that Sprint Nextel said no to $5b and a return of Nextel’s CEO from SK Telecom, Providence Equity Partners: The investment would have been in the form of convertible securities at a 20 to 30 percent premium over Sprint’s current stock price, and would have carried the return of Tim Donohue, who had headed Nextel when it was acquired by Sprint, and was chairman until 2005. The combined firm is worth slightly more than Nextel’s value when acquired, but Sprint has also sold some assets, notably its landline division.
SK Telecom is working on its own WiMax network, with the compatible WiBro flavor deployed (but with few customers) in South Korea. It also has an interest in its former division SK Teletech (now SKY), which makes advanced CDMA handsets that would work on Sprint’s network.
Further, SK Telecom is now the majority partner in the joint venture with EarthLink called Helio, which brings those selfsame advanced handsets into the hands of American youth (primarily) as an MVNO (mobile virtual network operator) buying most or perhaps all its minutes and data transfer from…Sprint Nextel.
The Sprint board said no, and declined a face-to-face, even.
A few days of testing with Clearwire’s new PC Card offering leaves me optimistic about mobile WiMax: While the card uses Expedience, the pre-WiMax offering that Clearwire’s former hardware division uses for all its equipment, I saw performance higher than using any other form of wireless networking except Wi-Fi in a fixed indoor location in my testing. I drove around Seattle and used the card in a car, with a booster, without, and in indoor locations. In most cases, I saw at or near the top rate. With the included external antenna, I was able to get over 1.6 Mbps downstream. Upstream rates are, as promised, about 256 Kbps or slower, and that’s something they need to improve.
With full-on, true mobile WiMax expected to deliver substantially higher rates for mobile and nomadic purposes, it’s possible Clearwire has a winner. Read my full review for how I expect that to play out and more detail about how the card works. (The review appears as part of a series of items I’m writing for a group blog on holiday gift gadgets.)
Seemingly very on-target profile of Clearwire head Craig McCaw, the founder or inspiration for much of what the cell industry is doing today: Even though the best-known, but not only well-known McCaw is a local, I forget how many pies he’s had fingers in. This Wall Street Journal article has a nice box that explains how he either started or was involved in every major cell operator in the U.S. except Verizon.
Which is why Clearwire can raise billions, despite his failed satellite phone effort, and why he’s moving forward at a crazy rate. It’s also why he was able to negotiate the $300m deal with AT&T to grab a huge hunk of the BellSouth spectrum holdings they were obliged (through his constant lobbying) to spin off as part of the merger.
I tested Clearwire’s pre-WiMax PC Card offering this week, and was rather pleasantly surprised at its consistent performance and high throughput.
The Wall Street Journal reports the deal for a joint mobile WiMax network is off between Sprint Nextel, Clearwire: That doesn’t mean either company is abandoning plans, nor that the two won’t forge a new deal. But with the departure of Sprint’s head due to a lack of confidence in his initiatives, it’s hard to see how an interim CEO could sign off on something that might last for years or even decades.
The deal between the two firms was for them to use complementary spectrum holdings and carry out spectrum swaps to create nonoverlapping network buildouts that would cover the whole country. Sprint would also allow Clearwire to resell its 3G EVDO network, a critical stage in building a roaming business audience. The complementary buildout would prevent double building, and provide the full set of frequencies in each market needed to ensure the highest data rates.
The Journal reports that some of Clearwire’s partners—Intel, Motorola, and Samsung—might “try to inject financing into Clearwire” to keep the WiMax network buildout on track. Intel and Motorola previously put in hundreds of millions.
Wall Street Journal spells out that Sprint Nextel has put many options on the table for WiMax rollout, but canceling it appears unlikely: The takeaway here is that Sprint might merge with Clearwire through a spinoff that would form a separate public company, look for specific investment in the WiMax unit, purchase Clearwire—or just sign the darned contract with Clearwire for building a complementary network footprint. Sprint is trying to get its act together in preparation of the entrance of a new permanent CEO; they don’t want to stand still while they engage in a search.