Spinoff Gives Sprint, WiMAX a Second Wind

But part of the problem was the fact that the horse had left the barn already: The company had spent several years and much capital gathering its considerable licensed 2.5GHz spectrum holdings. It also has cut deals with everyone from device manufacturers to third-party application providers to make good on the vision that West has laid out since the beginning and that Wolff has touted now: Consumer electronics companies and handset manufacturers alike are planning on marketing mobile Internet devices under their own brands rather than becoming locked to a carrier.

According to ABI, that ecosystem eventually will contain hundreds of vendors, chipmakers, display and device manufacturers, application developers and service providers. Add in the fact that manufacturers like Motorola Inc., Nokia Siemens Networks, Samsung and Nortel already have tied much product development to Xohm for devices and network builds, and unloading the business unit became a dilemma. But the new Clearwire simply will take over those existing relationships and deals, and all proceeds according to plan.

“This was a complex puzzle to solve,” said Hesse. “We wanted to maximize the value of the enormous position we have in 2.5GHz, leverage the time-to-market advantage over competitors and other technologies, ensure a national footprint, take advantage of the natural synergies between 4G and 3G, make good on promises to our partners for applications and distribution, and find the financial flexibility to grow the WiMAX business while focusing on our core CDMA and iDEN opportunities.”

The spinoff further gives Sprint the flexibility to go in different directions as warranted. Hesse said that Sprint is not precluding “other options” as to what it may consider to deliver 4G technology to customers — meaning it might be hedging its bets and leaving the door open to building out LTE in the future.

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