Sprint Looks To Spin Off Its WiMax Service

By Clayton Harrison
Bloomberg News
Tuesday, December 4, 2007

Sprint Nextel may spin off its planned high-speed wireless service and seek investors to reduce the cost of building the network.

Sprint would buy high-speed service from the new company and resell it, acting chief executive Paul Saleh said yesterday at an investor conference in New York.

Plans for the unit may take "various forms," he said. "That's one of many." Sprint, based in Reston, has a group studying the proposal, he said.

Clearwire and Sprint scrapped a plan last month to jointly build a national network for delivering fast Internet connections on mobile devices.

Sprint, the third-biggest U.S. cellphone carrier, plans to activate high-speed networks this year in Chicago and the District. The networks' WiMax technology lets cellphones and laptops connect to the Internet throughout entire cities, rather than the smaller areas served by wireless-fidelity, or WiFi, technology.

Under the planned agreement with Clearwire, Sprint would have spent up to $5 billion through 2010. Saleh said the company will provide detail on its WiMax plans early next year.

A spinoff of the WiMax business "would be a good idea," said Jim Moorman, an analyst at Standard & Poor's in New York. He advises holding onto Sprint shares. "There have always been concerns that they were jumping into this headlong, and it could be a lot of money."

Sprint and Clearwire, based in Kirkland, Wash., are the only service providers planning nationwide WiMax networks. AT&T and Verizon Wireless, the two biggest U.S. cellphone carriers, are planning to use other technologies that will take longer to develop.

Intel, Motorola and Nokia are developing devices that can operate on a WiMax network.

© 2007 The Washington Post Company