Sprint could spin off WiMAX division, says interim CEO

Says company wants to attract investment for funding WiMAX deployment.

Interim Sprint CEO Paul Saleh told an investor conference this week that his company was looking at multiple options for dealing with its WiMAX division, including spinning it off to another entity.

Saleh, speaking at UBS’ Global Media and Communications Conference in New York on Monday, said that Sprint was currently examining its plans for widespread WiMAX deployment in 2008 and deciding “if it’s the right course for us.” He then said that in the future, Sprint’s WiMAX division could take “multiple forms,” including one scenario where Sprint would “contribute our [WiMAX] asset to some kind of entity and find investors who are willing to fund the deployment of WiMAX.” Sprint would then buy services from that entity and resell them are on the market, he said.

While Sprint has dedicated roughly $5 billion to rolling out WiMAX nationally, its commitment to the technology has been questioned ever since former CEO Gary Forsee, who was instrumental in the company’s decision to invest in WiMAX, stepped down in October. Sprint’s announcement earlier this month that it had terminated its letter of intent to build out a nationwide WiMAX network with Clearwire Communications only added to speculation that the carrier was planning to spin off its WiMAX division.

In addition to discussing his company’s future WiMAX plans, Saleh also discussed why Sprint and Clearwire decided to terminate their letter of intent. According to Saleh, having a WiMAX network split between the two companies had simply become too complicated, and the company was worried that it might confuse customers.

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Interim Sprint CEO Paul Saleh told an investor conference this week that his company was looking at multiple options for dealing with its WiMAX division, including spinning it off to another entity.

Saleh, speaking at UBS’ Global Media and Communications Conference in New York on Monday, said that Sprint was currently examining its plans for widespread WiMAX deployment in 2008 and deciding “if it’s the right course for us.” He then said that in the future, Sprint’s WiMAX division could take “multiple forms,” including one scenario where Sprint would “contribute our [WiMAX] asset to some kind of entity and find investors who are willing to fund the deployment of WiMAX.” Sprint would then buy services from that entity and resell them are on the market, he said.

While Sprint has dedicated roughly $5 billion to rolling out WiMAX nationally, its commitment to the technology has been questioned ever since former CEO Gary Forsee, who was instrumental in the company’s decision to invest in WiMAX, stepped down in October. Sprint’s announcement earlier this month that it had terminated its letter of intent to build out a nationwide WiMAX network with Clearwire Communications only added to speculation that the carrier was planning to spin off its WiMAX division.

In addition to discussing his company’s future WiMAX plans, Saleh also discussed why Sprint and Clearwire decided to terminate their letter of intent. According to Saleh, having a WiMAX network split between the two companies had simply become too complicated, and the company was worried that it might confuse customers.

“We cannot afford as an organization to not focus on customer experience and on the simplification of the business,” he said. “And where things broke down was we could not afford to have a potentially confusing experience from a customer perspective in markets where Clearwire was and markets where we were to service customers in a simpler way.”

Saleh did say that Sprint was still committed to having a soft launch of WiMAX by the end of the year in Baltimore, Chicago and Washington, DC, but he said the extent of further deployment plans was still up in the air. Sprint had originally set a target of reaching 100 million users with WiMAX by the end of 2008.