Sunday, October 9, 2011

Sprint: No more Clearwire devices after 2012

(AP) ? Sprint Nextel Corp. said Friday that it will stop selling phones and other devices compatible with Clearwire Corp.'s current 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 65 cents, or 32 percent, to $1.40 in afternoon trading Friday. Earlier in the day, the shares revisited an all-time low of $1.32 hit in August.

Sprint's stock also fell, but for different reasons. The company held an event for investors and analysts in New York on Friday, but it didn't say how it expects the iPhone to affect its results, now that it's able to sell the coveted smartphone. It also said it will need to raise more money to finance the construction of its new network.

Sprint, which is based in Overland Park, Kan., started taking pre-orders for the iPhone 4S on Friday and hopes that the phone will help the company recruit and keep customers in competition with AT&T Inc. and Verizon Wireless. But Sprint will pay Apple dearly for the privilege of selling the phone.

An iPhone that Sprint sells for $200 with a two-year contract costs $600 or so wholesale from Apple. Like other carriers, Sprint has to count on making up the difference over time through service fees. Analysts were looking for some clarity on Sprint's math here, and were frustrated.

CEO Dan Hesse said the iPhone would over time "be one of our most profitable devices" but did not elaborate.

Sprint's stock was down 42 cents, or 14 percent, at $2.60.

Analysts were also perplexed that Sprint isn't including Clearwire in its network revamp project. Sprint's president of network operations, Steve Elfman, said 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.

Clearwire, which is based in Kirkland, Wash., has said that it plans to build an LTE network in parallel with WiMax, and Sprint's Hesse left the door open to having Sprint buy access to that network after 2012. However, Clearwire's finances are weak, and it would need additional funding to build out LTE.

"I don't think anything fundamentally changed for us after today," Clearwire CEO Erik Prusch said in an interview. "Sprint is still dependent on us for their network."

Sprint, like other carriers, need additional spectrum to keep up with the long-term growth in wireless data use, and Clearwire has that spectrum, he said.

In a testy exchange with Sprint executives, a member of the audience at the investor meeting questioned why Sprint would risk forcing Clearwire to seek bankruptcy protection when it owns 54 percent of the company, and could lose its share of Clearwire's spectrum in a bankruptcy case.

Sprint executives didn't directly address that possibility, but Hesse noted that no bankruptcy case involving a wireless company has resulted in a disruption of service.

Sprint's 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.

Associated Press

Source: http://hosted2.ap.org/APDEFAULT/495d344a0d10421e9baa8ee77029cfbd/Article_2011-10-07-Sprint-Network/id-c54bc6cc28ce41d489f938106ff36600

september 11 2001 september 11 2001 pomegranate pomegranate 9 11 lightning dominica

No comments:

Post a Comment