Clearwire, Sprint Nextel now planning ‘common network architecture’ for WiMAX

Clearwire Corp. and Sprint Nextel Corp. still haven’t resurrected their now-defunct plan for a collaborative nationwide mobile WiMAX buildout, Clearwire CEO Ben Wolff said in a conference call this morning.
However, the two companies aren’t ignoring each other, either.
“The companies have aligned on common network architecture,” Wolff announced at Clearwire’s investor conference in Portland, Ore.
“The teams have made a lot of progress in the last 60 days,” Wolff said, adding that both companies are “making significant progress on the terms of our roaming agreement.”
Clearwire and Sprint Nextel had initially planned a joint WiMAX network, but the effort hit the skids last November.
Since the domestic partnership fell apart, both companies have been inundated with analyst and press speculation about the future viability of their individual mobile WiMAX plans.
Wolff asserted that Clearwire and Sprint Nextel are working together. The companies have shared testing data, he said, enabling further collaboration on standalone networks intended to roam seamlessly.
A live call
To highlight the companies’ partnership, Wolff demonstrated a live call with Xohm President Barry West using Clearwire’s mobile WiMAX trial network in Oregon and Sprint Nextel’s Xohm trial network in Virginia.
“I think this call demonstrates that this technology, which people still have doubts about, is really ready for primetime,” West said on the live call with Wolff. “I’m pleased to report that the technology is performing really well.”
West said Xohm’s trial network is experiencing download speeds of at least 3 megabits per second and upload speeds of as high as 2 Mbps. He then re-iterated Sprint Nextel’s commitment to commercially launch the service in the second half of the year.
Following the call, Wolff said it was the first time a call was demonstrated live via mobile WiMAX using VoIP.
Wolff also briefly addressed the rumors about Clearwire’s future, ranging from acquisition murmurs to investment from Google Inc.
“Clearwire’s policy is always to not comment on rumors,” Wolff said. “I hope you understand I’m going to politely decline to answer.”
Yet, the uncertainty and caution from analysts continues to flow.
Pali Research’s Walter Piecyk and Joseph Galone wrote: “The recent hype in the press about Google investing in WiMAX seems more to us like wishful thinking on the part of Sprint and Clearwire to find someone to fund a multi-billion dollar build out of WiMAX that those companies are either unable or unwilling to fund.”
Financial report
Clearwire also reported that it ended 2007 with about 394,000 subscribers and $151 million in revenue, with $45 million coming in the fourth quarter. The preliminary financial results for the year mostly highlighted subscriber numbers and populations covered by Clearwire’s network. The company declined to state profits.
Clearwire added 46,000 customers to its network in the fourth quarter, which fell almost 25% below Pali Research’s estimate. The company also reported a major slowdown on its mobile WiMAX network buildout. The previous plan with Sprint Nextel called for Clearwire’s portion of the network to cover a population 30.5 million, but that has been scaled back to as much as 6 million.
“The upside is that the new plan dramatically reduces the company’s capital requirements, but these changes are likely to have a large impact on our forward estimates and valuation on the company,” Piecyk and Galone wrote in a subsequent research note.
Company shares slid more than 16% to $12.87. This after stock rode a wave, increasing more than 20%, on Tuesday’s report that a more definitive Sprint Nextel deal was in the works.