Sprint Gets Itself Off the Hook with New WiMAX Deal

Implications: 1.      Operational management has been given to the Clearwire folks.  2.      It was not just [t]o appease concerns that Sprint might try to quash the new company's ability to compete with Sprint, [that] Mr. Hesse agreed to give up day-to-day control to Clearwire…” 3.      Hesse understood that WiMAX was a distraction from its important requirement of solving “problems in Sprint's core cellphone business

Analysis:  Forget about the old rhetoric that WiMAX is the future of Sprint – that without it, the service provider cannot survive.  The concentration on the technology was a diversion. The previous leadership could not figure out how to resolve its problem of having two incompatible networks.  And it was the kind of distraction that would have required dumping $5 billion into the project.  

If problems occur with the WiMAX network, it will not be Sprint’s fault anymore. The fingers will now be pointed at Clearwire.  In addition, Sprint gets rid of Barry West.  For an executive, who supposedly was ready to retire, and allegedly was enticed into staying, he seems to have been around for an awful long time.  Hesse evidently did a masterful sales job with the other participants in the agreement.  All of the obfuscation at CTIA was apparently a result of the ongoing negotiations between the parties.   

It should also be remembered that this one effort is not going to save WiMAX. There are still many questions and issues surrounding this solution that are unanswered. Oh, by the way, don't be surprised to see LTE shorten the ready for service date for Verizon and ATT. It is still early to "pop the cork".