Nortel Wi-Max: Sprint Loss May Not Be So Bad After All

Includes: NT, S
by: Mark Evans

Nortel (NT) has been licking its Wi-Max wounds ever since Sprint (NYSE:S) decided last year that it would build a $3-billion network with other suppliers. However, according to the Wall Street Journal, Sprint may be re-thinking its aggressive Wi-Max plans amid pushback from some shareholders who believe it’s too expensive a plan for unproven technology. Apparently, Sprint is looking at three options:

1. Form a joint venture or a partnership with Craig McCaw’s Clearwire (CLWR).

2. Maybe spin-off the WiMAX business.

3. Attract outside partners like cable companies to co-invest in the WiMAX buildout. Time Warner Cable (TWC) has had informal talks with the mobile operator, its partner in a four-play offering Pivot.

Not that Nortel should take any joy in the misfortunes of other suppliers but it is interesting that Nortel was seen as being behind when it missed out on the Sprint contract. As it turns out, Nortel may not be behind at all - at least it has time before the big deals start flowing in.