Yesterday, Sprint/Nextel and Clearwire Communications jointly announced the dissolution of a strategic partnership formed in July to launch a nationwide rollout of WiMax that was to begin in earnest in 2008, according to an AP report. Can’t say we didn’t see that coming.
The departure of Sprint CEO Gary Forsee in October was a clear indication that shareholders were getting antsy over his 3 billion dollar WiMax aspirations. A disappointing 3rd quarter earnings report released November 1st; followed by yesterdays break with Clearwire, seem to point to the boards intentions of abandoning the project of the largest holder of WiMax spectrum in the country.
According to spokespeople from both Sprint and Clearwire, the deal was nixed because of the complexities involved. Sprint says it will collaborate on building out a WiMax network with Clearwire in the future. Maybe just on a smaller scale? Sprint maintains that it is going ahead with its soft launch later this year in Chicago, and is on track for the wider commercial rollout in 2008. Beyond that, they are reviewing their business plan and will get back with us next year.
Will Verizon’s Open Network Lead to True FMC?
Verizon’s move to open up its network to any device or application indicates a major shift from the walled garden approach in the U.S. cellular industry, and opens up a real possibility of attaining the much sought after concept of Fixed Mobile Convergence. As the number two carrier behind AT&T, Verizon is well positioned to gain market share and spur some badly needed innovation of device and application development in the cellular markets.
In early 2008, Verizon will lay out its minimum specifications to device manufacturers and application developers, with widespread implementation expected to begin at the end of the year.
CDMA enabled handsets from any device manufacturer will be able to access the Verizon network. In the U.S., this means that Sprint Nextel will take the biggest hit, as consumers will be able to switch to Verizon without having to buy a new handset. Sprint has been losing market share recently and has seemingly put on hold its WiMax initiative for its 3G network build out. Subscribers of AT&T and T-Mobile will not be able to switch because they are on GSM networks, but one can only think that with the increased pressure, their walled gardens will eventually come crumbling down too.
Continue reading »