Sprint Needs XOHM to Succeed

Executives at Sprint (S) probably find a place of complete internal reflection when they watch the sitcom Friends and hear the theme song lyrics, “When it hasn’t been your day, your week, your month - or even your year (or two).”

Clearwire (CLWR) will be there for you.

The Wall Street Journal and Fortune [CNN] are both reporting that Kirkland, Washington based Clearwire Corp. is close to reaching a $12 billion dollar joint venture with Sprint that could resurrect the company’s once promising XOHM and WiMax revolution (via MocoNews).

Sprint has been inundated with various rumors lately, from selling out to T-Mobile to spinning off Nextel and now this. The truth is that the rumors are all probably equally true because if Sprint has proved one thing lately, it’s that they don’t know WHAT the hell they are doing. They could certainly use this helping hand.

But the help isn’t only coming from Clearwire… no-no-no-no-no… because Clearwire has recently received billions of dollars in 3rd party funding from the likes of:

• Comcast (CMCSA)
• Intel (INTC)
• Time Warner Cable (TWC)
• Google (GOOG)

Looks like Sprint chose to share copies of the house key instead of getting evicted. Nextel might still get spun off… Sprint might still get sold to T-Mobile… but it’s pretty clear that XOHM/WiMax is Sprint’s ticket out of the doghouse and if sharing it will salvage the company, ya gotta do what ya gotta do.

So what is WiMax and what is XOHM?

You know how people have been “raving” about the upcoming 3G iPhone and how quick and responsive it will be because of how fast the 3G network speeds are? Well, WiMax is equivalent to 4G and is a generic technology. XOHM is Sprint’s branded execution of that technology and they were the first to announce their pursuit of WiMax integration. The network is capable of providing both mobile phone service and wireless internet connectivity.

They shelved the project for many reasons, but mostly because the company is a train wreck. The Nextel merger didn’t do much except complicate things… and while experts have raved about what XOHM could accomplish, the situation amounted to having a really, really hot finance with too much freaking baggage. The joint venture with Clearwire represents the figurative prenuptial agreement with mandatory marriage counseling.

Both sources (see above) are warning that the deal is not final and it’s possible nothing gets done. It would be shame, because this joint venture could take a once proud company back to new heights.

The crazy thing about all of this is that the joint venture would operate solely under the Clearwire name. Comcast and TimeWarner Cable are both huge providers of internet connection and Google is just getting its foot in the mobile phone door. Intel is an emerging provider of chips for mobile devices and, holy geez, could this pot get stewed up any more?

The bottom line is that this is good (if successful) for everyone. Consumers will get their magical 4G speeds. Sprint finds resurgence and momentum to breathe life back into the company. Clearwire finds a flagship product. And, all those Clearwire financial providers get to test their respective waters without the risks and burden of going it alone.

Hey, head honchos, will you do us all a favor? Sit down at that table and don’t get up until you’ve reached an agreement.

Disclosure: none