Insightful analysis and commentary for the US and global equity investor
Contributors: Douglas McIntyre Jon C. Ogg

Previous Posts

Friday, October 27, 2006

Spint's WiMax Bet Gets Bigger (S)(VZ)(MOT)(INTC)

Sprint had some pretty raw earnings, as expected. Net profit was off 52% to $247 million. The company added 233,000 net new customers in its wireless business, but this was down from 708,000 the previous quarter.

Wall St. was a bit relieved and Sprint's shares rose slightly.

Because its larger rivals like Cingular and Verizon are adding to their larger bases of cell users much faster than Sprint is, the mergered operation of Nextel and Sprint needs to come up with some advantage to lure more share.

It would appear that it will have to be WiMax. Sprint believes that the $3 billion it is spending to build out a WiMax network over the next two years will bring wide and seamless broadband phone coverage to its subscribers before its rivals can complete their 3G networks.

Intel and Motorola has been the largest backers of the WiMax standard, and they have a number of phone companies around the world from Ireland to India in trials for the new technology.

Sprint does not have much else to rely on. Cingular should announce that it added about 1.4 million new subsribers in the last quarter, and that means the Sprint is losing ground.

Douglas A. McIntyre can be reached at He does not own securities in companies that he writes about.

Powered by Blogger