When it comes to the giant cable companies, Sprint Nextel’s new battle cry may be, “If you can’t beat ’em, join ’em.”
The nation’s third-largest wireless carrier just announced that its $5 billion plan to develop the first ultra-fast “fourth generation” wireless Internet network based on WiMax technology has hit a snag.
As a result, Sprint is terminating its deal with Clearwire, its primary technology partner in building the service, citing an inability to resolve “complexities” in their proposed alliance.
The company, which is bleeding subscribers and profits, has viewed WiMax as a way to get a leg up on the competition.
The promising but largely unproven technology boasts the ability to deliver broadband-quality Internet access wirelessly at speeds up to five times faster than what AT&T and Sprint currently offer.
Sprint’s newfound technology trouble now has the potential to actually strengthen its long-term relationship with cable companies that might have otherwise looked at WiMax as another budding threat to their own broadband businesses, a la Verizon’s FiOS service.
Sanford C. Bernstein analyst Craig Moffett said the development now opens the door to the possibility of cable operators teaming with Sprint on building a WiMax network instead.
Faster wireless Internet connections are viewed by many in the mobile and media industries as a key means of attracting users to new entertainment options designed for phones, laptops and other portable devices – everything from music downloads to streaming and downloading movies, TV shows and other video clips.
It’s also the next frontier for competition among the nation’s leading wireless carriers and cable companies in their bid for subscribers.
Sprint said it remains committed to WiMax – which it is already testing in some cities and was scheduled to come to New York in 2008 – but acknowledged it is in the midst of reconsidering its adoption plans. It intends to clarify its strategy next year.
The company earlier this year said it planned to spend as much as $5 billion by 2010 to build the network and make it available to as many as 100 million users in the U.S.
Telecom analysts cheered the move to table the plan for now, noting it will free up Sprint, which is bleeding subscribers and profits and minus a CEO, to focus on turning around its core cellphone business in the short term. brian.garrity@nypost.com