Wifi Revolution

Sprint (News - Alert) Nextel Corp and Clearwire Corp may be ending their deal before it even takes off. Both the companies had entered into an agreement to build a nationwide high-speed wireless network based on the emerging WiMax technology but Reuters has cited a Wall Street Journal report as saying that the complexities of the transaction and the departure last month of Sprint Chief Executive Gary Forsee, have made it too difficult to reach a final agreement.

 

The Reuters report noted that both the companies were unavailable for the comment, but that the earlier agreement's details were to be finalized by mid-September, and neither company has declared anything yet.

 

The agreement between Sprint and Clearwire, which was reached in July, was to connect their WiMax networks, share costs and offer services to about 100 million people by the end of 2008.

 

According to the industry analysts, after the exit of Gary Forsee and the pressure from investors to cut the company spending, the No. 3 U.S. mobile service provider will be forced to cut spending after more than a year of subscriber losses.

 

But the company insists that there will be no changes to its plans of spending on the next generation technology and the company still expects to spend $5 billion by 2010 on this technology.

 

If the deal falls apart, analysts predict that Clearwire would be on the losing side as the company had a chance to expand its geographical reach without huge build out costs. As a result, the shares of the company fell nearly 16 percent in early October on worries that the Sprint partnership was at risk.

 

 

 

 

 

 

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