Who can forget Ralph Witworth's ill timed foray
into Home Depot (NYSE:HD) and the carnage that ensued for shareholders. At
least Sprint (NYSE:S) seems to have learned from history and gave his
demands their due course, the garbage can.
In February I begged Sprint's new CEO Dan Hesse to ignore Withworth's call to abandon the WiMax effort and spin off the long distance unit.
Out Wednesday from the Journal, Comcast (NASDAQ:CMCSA) and Time Warner Cable (TWC) are considering providing funding for a new wireless company that would be operated by both Sprint and Clearwire (CLWR).
The new venture would create a nationwide wireless network using Sprint's WiMax technology. The goal is to provide high-speed Web access and high-quality mobile video to laptops, cellphones and other mobile devices. Sprint and Clearwire have been working for months on WiMax have looked to raise at least $3 billion for a joint venture.
Comcast, Time Warner Cable and Bright House Networks are rumored to be contributing $1.7 billion to the new company.
This does some very important things:
- Begins "tying up loose ends" at Sprint for any potential buyer. With all the uncertainty surrounding the effort, potential buyers have been staying at arm's length. With this cleared up, a price for the company can be more easily attained.
- Sprint Network: Sprint already has a far superior network to rival AT&T (NYSE:T), its problems have been customer service related. As mobile web-browsing becomes more prevalent, the best network has the clear advantage. As this is rolled-out, that will be Sprint.
Rather than listening to Whitworth, Hesse ignored his calls to either abandon, sell or otherwise dispose of the WiMax effort and instead seems to be on the cusp of making it the future of the company. Good for him...
Disclosure: No position.