Sprint to spin off its WiMAX business?

Posted Dec 6th 2007 1:22PM by Brian White
Filed under: Rumors, Sprint Nextel Corp (S)

After Sprint Nextel Corp. (NYSE: S) announced recently it would cease the buildout of its national 4G wireless network that was being constructed with WiMAX technology, many industry pundits wondered where that part of Sprint's business would end up.

After all, the wireless carrier has lost hundreds of thousands of customer in the last four quarters, has booted its CEO amid falling revenues and profits and seems to have lost focus of its core operation -- providing wireless service on its national network (not building a new one with billions of dollars).

Sprint has already dumped quite a bit of cash into the now-on-the-sideline WiMAX end of its business, and several rumors have surfaced on what the company planned to do with it now that it's returning its focus to restoring revenue and profit to its struggling wireless voice business. What to do? How about spin off the WiMAX end into another separate company?

During the summer of 2006, Sprint's enthusiasm of building the largest 4G wireless data network in the U.S. was the darling of Wall Street and of the entire wireless industry. It began constructing that network based on the relatively new WiMAX standard, coaxing many global wireless hardware companies to join in.

A little over a year later, and after a string of quarterly financial disappointments, Sprint seemingly shoved its WiMAX plans into a corner and told it to stay there, much like an errant child. Sprint's acting CEO Paul Saleh, probably bowing to furious pressure, has all but said that Sprint will be spinning off its WiMAX business into another company. Will Sprint investors be pleased? Probably, since it will relieve billions of dollars in future spending from a company whose quarter-to-quarter revenues are under a very large microscope.

Tags: paul saleh, PaulSaleh, S, Sprint Nextel, Sprint WiMAX, Sprint WiMAX spinoff, SprintNextel, SprintWimax, SprintWimaxSpinoff, WiMAX