Clearwire and Sprint make up?

Talks back on for joint launch of nation wide WiMAX network

The Wall Street Journal reports (http://online.wsj.com/article/SB120162984956525859.html?mod=googlenews_wsj ) Sprint and Clearwire have revived talks for a nation wide WiMAX network that would use funding from Intel, Google and Best Buy.  There is no further evidence that the much-discussed joint venture will go forward much less reaching the 100 million Americans by Christmas 2008. The article reports interest in the joint venture by a series of private equity firms.  There may also be a foreign investor. Clearwire stock price jumped 20% on the news.

That's the news, now for the analysis. This is great news for the industry. The named investors Intel, Google and Best Buy have everything to gain if the Sprint-Clearwire  joint venture goes forward and a lot to lose if it doesn't (especially Intel). My unscientific guess regarding a "foreign strategic telecom investor" is that it could be a vendor such as Samsung/Nokia-Siemens/Alca-Lu, etc or a service provider such as Korea Telecom. The Best Buy investment is interesting in that the joint venture would do well to have a high end electronics ("high end" by my standards any way) to provide a retail outlet for CPE. The retail partner should not be under-estimated. Clearwire's Mexican affiliate MVS, has done very well utilizing retail outlets as a distribution mechanism.

This report may also indicate some stability and subsequent direction in the Sprint boardroom regarding executive choices and decisions.  Will they hit their goal of offering service to 100 million Americans by the end of this year? Unless a tremendous amount of dollars and manpower go toward that goal, I'm going to have to offer an unscientific "I doubt it, but good luck!"

Frank Ohrtman
WMX Systems

Tuesday, January 29, 2008 in Business  | Permalink |  Comments (0)