Solutions to help your business Sign up for our newsletters Join our Community
  • Share

Sprint looking for WiMAX options

More on this Topic

Industry News

Blogs

Briefing Room

Everyone from Intel to Best Buy has been named as a possible partner, but Sprintís main goal now seems to be to revive the Clearwire partnership

In the last few weeks, numerous potential partners have emerged as possible saviors for Sprintís ailing WiMAX efforts, but so far thereís been little substance to the rumors except for Sprintís own admission itís searching for a suitor.

On its earnings call last week, Sprint reported a loss of $29.5 billion, and new CEO Dan Hesse admitted the problems at Sprint were worse than he envisioned when he first took over. But although much of the financial community expected the new and expensive 4G network to be the first item on the chopping block during Sprintís restructuring, Hesse sought to assure investors that Sprintís interest in WiMAX had not flagged.

ďI want to leave you with no doubt that our first priority is our core business, which is where our people and our capital are focused without distraction,Ē Hesse said. ďBut Sprint has an enormous asset--nearly 100 megahertz of unutilized spectrum--and the opportunity to have a three-year head start with our Xohm service, true wireless broadband with multi-megabit speed.Ē

Hesse also indicated Sprint doesnít want to tackle that opportunity alone. Sprint is still very much open to reviving the spectrum-sharing partnership with Clearwire that collapsed late last year, he said. In fact, Sprint is still in active negotiations with the broadband wireless provider, which owns the same 2.5-GHz spectrum but in smaller markets than Sprintís primarily large metro-area licenses. No final agreement has been reached though, Hesse said, and he didnít address any of the other rumors circulating about other possible tie-ups.

The most prominent of those rumors is an investment by Intel. In February, TheStreet.com first reported that Intel would make a $2 billion investment in a Clearwire-Sprint joint venture. TheStreet, however, also said the deal could be announced publicly in the next few days, which never happened. Still, Intelís potential interest in a deal holds a lot of water. Itís already invested $600 million in Clearwire, which was, in part, an incentive for Clearwire to abandon its NextNet proprietary broadband wireless technology in favor of WiMAX. Intel is hell-bent on creating a Mobile WiMAX market in the U.S., giving it an outlet for its next-generation wireless networking chips. Given that the two largest operators in the U.S., Verizon Wireless and AT&T, have already tapped Long Term Evolution as their future 4G technology, Intel probably wants to assure that the countryís sole nationwide WiMAX network makes it beyond infancy.

But Intel isnít the only one supposedly interested. News reports and analysts have named companies from every corner of the telecom and consumer electronics worlds as possible investors: search-engine giant Google, South Korean telco SK Telecom, vendor Motorola, cable operator Comcast and even big-box retailer Best Buy. Google definitely has an acute interest in broadband wireless as a means to extend its Web services to the mobile world, but Google is much more motivated in ensuring 3G and 4G networks are open to its applications rather than in being in the wireless operator business itself. Google participated in the ongoing 700 MHz auctions, but it is widely believed it only bid up nationwide spectrum to meet the FCCís open access threshold, thus requiring that the eventual winner open its networks to Google services. But Google has a clear interest in Sprint. It has partnered with the carrier to provide portal services for the new Xohm network and is working with Sprint on the 3G front to promote its new Android operating system.

SK Telecom has already shown an active interest in the U.S. market, joining with EarthLink to launch MVNO Helio. Its investment continues. Last year SK invested another $270 million to prop up the venture, despite the virtual operatorís poor financial performance. Like Intel, SK Telecom has a vested interest in seeing WiMAX succeed in the U.S. SK currently runs the only commercial Mobile WiMAX network in Korea, using Samsung-developed WiBro technology, and the success of its network venture depends on WiMAXís global adoption.

Motorola is the other named potential investor pining for WiMAXís success. As the company has struggled with 3G, it has reinvented itself as a 4G player focusing particularly on WiMAX. Along with Intel, Moto also invested $300 million in Clearwire and took over Clearwireís NextNet infrastructure business. But Motorola is reeling from its own financial problems and probably isnít considering many major capital outlays.

Comcast might feasibly be interested in participating in a Sprint-Clearwire joint venture in order to offer wireless broadband to compliment its home cable modem services. The problem is Clearwireís business model directly competes with Comcastís home broadband services in many markets. And so far, Comcastís quadruple play experiment with Sprint in the Pivot joint venture has been a wash.

The last rumored investor, Best Buy, is probably the most unlikely as the retailer has no interest in whether WiMAX succeeds or fails. ďBest Buy would be a highly relevant distribution partner for JV services,Ē said ThinkEquity in a research note on Clearwire issued today. ďNotwithstanding, we never understood why this required Best Buy to invest in the JV; we would be surprised if Best Buy significantly invests in the JV.Ē

Though Best Buyís participation is unlikely, ThinkEquity expects an investment package to emerge soon. Intel will be the catalyst for such a transaction, and it can bring other big players to the table, the analyst firm said.

Want to use this article? Click here for options!
© 2014 Penton Media Inc.

Learning Library

Webcasts

White Papers

Featured Content

The Latest

News

From the Blog

Briefingroom

Join the Discussion

Resources

Get more out of Connected Planet by visiting our related resources below:

Connected Planet highlights the next generation of service providers, as well as how their customers use services in new ways.

Subscribe Now

Back to Top