Mobile operator Sprint Nextel will scrap its agreement with Clearwire to jointly build a nationwide high-speed wireless network based on Wimax technology. The two companies could not resolve complexities associated with their July co-signed agreement and failed to reach final agreement on the terms of the transaction.
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"In July 2007 when Sprint and Clearwire announced their intention to join their networks, we published a comment stating that the partnership was primarily aimed at lowering the overall Wimax network development and operating cost for both companies," said Julien Grivolas, senior analyst at Ovum. "Based on the former LOI terms, Sprint Nextel was due to be responsible for deploying 65% of the network, which was expected to cover approximately 100 million people by the end of 2008. We estimated that Sprint would have saved around 30% on its £1.25m-£1.5m of Wimax CAPEX originally announced for the 2007-2008 period thanks to this agreement."
"The fact that Sprint could potentially downsize its Wimax plans is bad news for Wimax in general. Since Sprint revealed its Wimax plans, the operator has been playing a critical role in the Wimax industry, giving a huge boost to the technology in terms of credibility first but also in contributing to create a strong ecosystem around the technology," added Grivolas.