Sprint Says No More Clearwire Devices after 2012
Sprint Nextel Corp. said Friday that it will stop selling phones and other devices compatible with Clearwire Corp.'s network at the end of next year, after it switches on its own higher-speed, fourth-generation data network.
Sprint is Clearwire's largest customer and majority owner, but doesn't control it. Phones labeled "Sprint 4G" use Clearwire's network today.
Clearwire's stock fell 54 cents, or 26 percent, to $1.51 in midday trading Friday. The shares hit a 52-week low of $1.32 in August. Sprint's stock rose 12 cents, or 4.1 percent, to $3.13.
Sprint's president of network operations, Steve Elfman, told investors and analysts at a meeting in New York that the company is already building its own fourth-generation, or 4G, data network and will inaugurate it next summer. By the end of 2012, it will cover as many people as Clearwire's network does today, and a year later, it will be far larger.
Sprint is using a 4G technology known as LTE, for Long-Term Evolution. Rivals AT&T Inc. and Verizon Wireless are using the same technology. Clearwire, on the other hand, uses an earlier technology called WiMax. That means today's "Sprint 4G" devices will need to be replaced to use the new LTE network.
Sprint, along with AT&T and Verizon, started taking pre-orders for the iPhone 4S on Friday. It's the first time the struggling carrier has been able to sell the coveted smartphone. The network revamp will help the company support its iPhone users with wireless data, Sprint executives said. However, today's iPhones can use neither Clearwire's 4G network nor Sprint's coming one.
The radio spectrum that Sprint is using for 4G is being freed up by the shutdown of the Nextel network, a process that's set to be completed by the end of next year.
Sprint bought Nextel in 2005, an acquisition that soon turned disastrous. Nextel subscribers started leaving, and Sprint was saddled with the cost of running two incompatible networks. That has contributed to the company's constant quarterly financial losses since 2007.
"Overall, Sprint appears to be doing the best it can to chart a course forward, but it is starting out significantly hamstrung by decisions made in the past," Ovum analyst Jan Dawson said.
Source: Associated Press
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