Sprint Considering WiMax Spinoff and Merger with Clearwire - WSJ

Includes: S
by: Steven Towns

The Wall Street Journal reports sources say Sprint is weighing its options for its plans to roll out 4G high-speed wireless Internet service using WiMax technology, including a possible spinoff and merger with Clearwire Corp. The sources said Sprint's board will be reviewing its WiMax plans and the company's CEO search at a retreat this weekend. Acting CEO Paul Saleh declined to name any CEO candidates, but sources say Sprint spinoff Embarq Co. CEO Dan Hesse is a front-runner. Separately, Sprint is reportedly close to reaching an agreement with Google to offer mobile devices based on Google's new mobile operating platform. In its (Q3 earnings) conference call Thursday, Sprint said it spent $73 million on WiMax in Q3, as it is "continuing to prepare for soft launches of WiMax in the Baltimore, Washington and Chicago markets, late this year." (Full transcript). However, Sprint said it will likely spend less than its 2007 budget for WiMax. Sprint has a three-year $5B WiMax budget. Over the summer, Sprint and Clearwire reached a tentative agreement to collaborate on a national WiMax network, but a definitive agreement has yet to be signed. The sources told the WSJ any WiMax restructuring for Sprint would have to wait for a new CEO to be hired. Shares of Sprint fell to a new 52-week low, losing 3% to $16.58 on Thursday. Clearwire gained 4.9% to $21.53.

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