In a blow to WiMax enthusiasts, the Reston, Va., telco says it has torn up an agreement with
, taking it off the hook to jointly build a nationwide mobile broadband network. The deal called for Sprint to chip in $2.75 billion toward the expansion of 4G wireless service to 19 cities by the end of next year.
The news comes just two weeks after Sprint put its wireless service partnership with cable companies on hold. The so-called Pivot project was an attempt to add a mobile phone offering to the cable companies' triple play service bundle.
and more recently
Time Warner Cable
told analysts and investors that they were seeing very little demand for the Pivot offer.
Earlier this month, Sprint halted a plan push Pivot into 10 new markets, which seemed to confirm speculation that the cable partnership was crumbling.
Sprint's strategic reversals are part of acting CEO Paul Saleh's new "focus on simplicity." Finance chief Saleh took of the top job as the company searches for a replacement for Gary Forsee, who resigned last month.
Some hallmarks of Forsee's term include repeated sales shortfalls, poor integration of Nextel, the loss of a massive federal contract opportunity and the alarming erosion of its subscriber rolls.
As the No.3 wireless shop, Sprint struggled to compete head on with giant duo
. Forsee's plan was to take a different approach by partnering with cable companies and charting a bold plan to beat other telcos to the WiMax punch.
Clearwire shares were crushed by the demise of the Sprint venture down $3.69, or 20%, to $14.39 in early trading Friday. And Sprint shares, which hit a 52-week low at one point Thursday, recovered somewhat. The stock was up 8 cents in early trading Friday.