New-ish partners pull out of joint WiMAX deal citing failure to agree terms… 

Sprint Nextel and Clearwire have mutually agreed to terminate the Letter of Intent (LOI) signed in July 2007, and covering a proposed WiMAX network sharing agreement (click). The two companies apparently could not resolve complexities associated with the LOI and failed to reach final agreement on the terms of the transaction.

Sprint says it remains fully committed to developing WiMAX services and deploying a WiMAX network, and that it expects to continue to work with Clearwire on future opportunities to enhance the deployment of WiMAX capabilities through ongoing discussions that include the possibility of roaming, frequency interference coordination, spectrum exchanges, technology evolution and development and network standards.

“We are on track for soft launch late this year in the Chicago and Baltimore/Washington markets and commercial launch in 2008,” states Keith Cowan, Sprint's president of Strategic Planning and Corporate Initiatives. “In line with Sprint's mandate of improving the customers experience and simplifying our operations, we look forward to working with Clearwire on opportunities such as roaming and standards.”

In light of this announcement, Sprint is reviewing its WiMAX business plans and outlook and the company expects to comment further on these topics early next year.

Although many pundits are now convinced that the wheels are about to come off the mobile WiMAX wagon, Clearwire itself continues to pump borrowed money into the technology and its network construction. At the beginning of the month the company announced a US$250mn increase in its secured term loan to an aggregate of US$1.25bn. The company says it will use the proceeds to further support its expansion plans, spectrum acquisitions and for general corporate purposes.

“Following the close of our US$1bn term loan in August, we received inquiries from investors who were interested in securing larger positions in our bank debt. This tack-on facility helps meet investor demand and provides capital to fund the development and launch of new markets and the acquisition of additional spectrum,” comments John Butler Clearwire's chief financial officer.

It’ll be interesting to see how important last month’s endorsement of WiMAX as a part of the framework of the IMT-2000 set of standards will be to the future of the technology. In October the ITU Radiocommunication Assembly (RA-07) formally recognised technology derived from IEEE 802.16 by incorporating it as the sixth terrestrial IMT-2000 radio interface. This was the first addition to IMT-2000 since the original five were adopted years ago as part of the 3G radio standards being used globally and, says the ITU, significantly pushes the technological envelope of IMT-2000 capabilities.

“WiMAX technology currently has the potential to reach 2.7 billion people,” contends Ron Resnick, president of the WiMAX Forum.
John Williamson