Clearwire, Sprint Nextel call off WiMAX partnership: Sprint Nextel ‘remains fully committed’ to Xohm rollout

With the launch of WiMAX trial markets just weeks away, Sprint Nextel Corp. says it is re-examining its WiMAX business plans and has abandoned a partnership with Clearwire Corp. intended to promote a faster, cheaper deployment of the technology by splitting the costs between the two companies.
Sprint Nextel said the decision to terminate a WiMAX letter of intent with Clearwire signed in July was mutual, as “the two companies could not resolve complexities associated with the [letter of intent] and failed to reach final agreement on the terms of the transaction.”
The letter had outlined a grand plan for national deployment of a WiMAX network, with Sprint Nextel footing the bill to cover 70 million potential customers and Clearwire covering 30 million by the end of next year. With the departure of former Sprint Nextel CEO Gary Forsee, Sprint Nextel’s WiMAX plans had been in question; the company’s acting CEO, Paul Saleh, has emphasized simplifying the carrier’s business and making further commitment to customer care in order to try to reverse the wireless carrier’s customer losses.
Sprint Nextel said in a company statement that it “remains fully committed to developing WiMAX services and deploying a WiMAX network that will allow customers to realize the benefits of a mobile broadband Internet experience.” It added that it expects to continue working with Clearwire “on future opportunities to enhance deployment of robust WiMAX capabilities through ongoing discussions that include the possibility of roaming, frequency interference coordination, spectrum exchanges, technology evolution and development and network standards.”
Sprint Nextel’s president of strategic planning and corporate initiatives, Keith Cowan, affirmed that the company is still on track to soft-launch its Chicago and Baltimore/Washington D.C. markets late this year under the brand Xohm. The company said it is reviewing its WiMAX plans and expects to comment on them in more detail early next year.
For its part, Clearwire said as part of its third quarter earnings release that the companies are still figuring out how best to collaborate. During the course of discussions about the letter of intent, Clearwire said that it and Sprint Nextel “concluded that the joint build transaction originally contemplated by the . letter of intent was likely to introduce a level of additional complexity to each party’s business that would be inconsistent with each company’s focus on simplicity and the customer experience.”
Although the letter of intent has been terminated, Clearwire said that “discussions continue regarding the best means to accomplish the benefits that were expected under the letter. . Notwithstanding the ongoing discussions, there can be no assurance that a transaction or agreement between Clearwire and Sprint Nextel will be concluded.”
Separately, Clearwire reported widening losses in its most recent quarter.