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Whatever Happened To Sprint's WiMax Venture?

Notable news from the CTIA wireless conference in Las Vegas today (aside from FCC Chairman Kevin Martin's dismissal of Skype's open wireless petition) was the lack of news from Sprint Nextel on its WiMax venture with Clearwire, cable operators Comcast and Time Warner and Silicon Valley giants Google and Intel.

A source familiar with negotiations between the companies told me last week that the companies were in talks about the formation of a next-generation high-speed wireless venture that would be funded by the cable operators and Google and Intel and operated by Sprint and Clearwire. Today, new Sprint Chief Executive Dan Hesse was expected to end the suspense and announce during his keynote speech this morning a $5 billion venture between the companies that would compete with future high-speed wireless plans by Verizon Wirelss and AT&T. No dice.

Instead, Hesse said the company will move forward with its WiMAx plans, called Xohm, but didn't mention any partners.

"We expect to have at least a two year time to market advantage" over rival carriers, Hesse said referring to next-generation high-speed wireless plans by competitors.

He also talked up the company's monthly $99 flat rate plan for voice, data, messaging, and email services. (He also talked it up in a recent black and white stripped down commercial this reporter saw at least three times during primo Sunday primetime airing of Oprah's Big Give. He also introduced new, sleeker and smarter phones (like every other carrier) and reaffirmed Sprint's commitment to open principal for its network.

Sprint, which has suffered from an customer exodus from its service since its merger with Nextel and miserable financials, has bet on WiMax technology to gain future subscribers. Yet finding funding for the nationwide network, which is estimated to cost around $5 billion, has been challenging.

"The lack of an announcement raises questions about whether or not a deal will happen after all," said Criag Moffett, an analyst at Sanford C. Bernstein. "Investors are likely to be disappoitned that the burden of building Xohm, for now, continues to rest on Sprint's shoulders."

By Cecilia Kang  |  April 1, 2008; 7:18 PM ET  | Category:  Cecilia Kang
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