Technology Watch: It looks like Sprint and Clearwire are again near a deal to form a WiMax joint venture that would involve a $2BN injection from Sprint and potentially other companies such as Intel and Motorola.
I personally believe that the activist investors that are giving Sprint a hard time for its potential WiMax investment are being short-sighted. As this BusinessWeek article attests, mobile penetration is hitting the mature level of 80% this year, which means the industry can expect slower growth and more price competition going forward. Sprint itself may even throw down the guantlet with a rumored all-you-can-eat plan.
Meanwhile, yesterday Comcast ruled out buying Sprint (or Yahoo) in the near term. Sprint has attractive assets and is trading at a fraction of book value, but is at a clear operational disadvantage vs. AT&T and Verizon on the mobile wireless side, and if it hives off its WiMax business does not have a strategy to move back into a competitive position with them. The eventual natural acquirors are Comcast or Time Warner Cable, but such an acquisition is likely years away and Sprint becomes less strategic to the cable cos without the wireless broadband assets. Frankly, now Clearwire would be the more attractive (and affordable) target for the cable companies, particularly if it completes its JV with Sprint.
[FULL DISCLOSURE: My firm Catalyst Investors was an early investor in Clearwire and still owns a stake. May family also (unfortunately) owns stock in Comcast and Sprint.]