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June 14, 2007

Sprint's latest WiMax plans

Posted by Tricia Duryee at 10:03 AM

The WSJ is reporting that Sprint Nextel is exploring new options for financing its plans to build a national WiMax wireless broadband network. The options may include forming a partnership or joint venture with Craig McCaw's Clearwire, or seeking an infusion of cash from cable providers.

In addition, Clearwire separately announced today that it formed a distribution agreement with DirecTV and EchoStar Communications to resell each other's products and services.

The WSJ, quoting "people familiar with the matter," said the options Sprint are considering an effort to make investors less concerned about the cost of the WiMax plan.

So far, Sprint has committed to spending about $3 billion through next year to build a network that will offer high-speed wireless Internet access to 100 million people.

One deal supposedly under consideration would be to spin off Sprint's WiMax unit as part of a deal with Clearwire, the WSJ said people familiar with the matter said. The two sides have had discussions in recent months.

A partnership between the two would not be completely out of the question if you look at the many ties that McCaw has had with Sprint Nextel in the past. McCaw previously controlled Nextel Communications, a company he helped rebuild to become the fifth largest carrier in the U.S. before Sprint purchased it. Nextel had extremely close ties to Motorola, which made Nextel's special push-to-talk services. It is Motorola that purchased Clearwire's WiMax equipment subsidiary, and now has a very close relationship with Clearwire and Sprint.

I talked to Ben Wolff, Clearwire's CEO, briefly this morning. He declined to comment on all of the above.

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Tricia Duryee
Tricia Duryee
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