- Avian Securities is out with some interesting comments on news that Sprint (NYSE:S) and Clearwire (NASDAQ:CLWR) have opted to break the agreement to collaborate on a nationwide Mobile WiMAX launch in 2008. They signed the deal just last July – this U-turn seems like another sign of management chaos at Sprint. The agreement was supposed to help both companies to lower the costs of their network roll-outs, guarantee smooth roaming between networks and maximize the geographic coverage. Both Sprint and Clearwire now face the danger of far more limited early coverage, higher CAPEX costs and the possibility of a damaging early price war as the WiMAX pioneers now may go head-to-head in a competition for a limited pool of early adapters.
It’s a little strange how there is no word on early Mobile WiMAX handsets by November 2007 – Avian's discussions with certain hardware vendors at the recent CTIA conference has lead them firm to believe that development of Mobile WiMAX phones has been slower than anticipated. The early service may well have to depend on laptops with internal WiMAX connectivity or PC cards sold separately. This market is already being addressed by Verizon and several other mobile operators and it’s not clear that it’s large enough to offer much nourishment to Mobile WiMAX players.
Nortel (NYSE:NT) and Alcatel Lucent (NYSE:ALU) were badly beaten in the 3G mobile infrastructure competition; the revenue growth hopes of their mobile network units in 2008-2010 rest largely on strong early ramp-up of global Mobile WiMAX orders. America is the focus of the entire global WiMAX market – the Sprint launch of the service is the most important early roll-out in the world.
According to Avian, the blow-up of the Sprint-Clearwire deal is an ominous sign – there is a chance that the new Sprint CEO might scale down WiMAX plans radically or scrap the project entirely. Needless to say, the impact on Alcatel Lucent and particularly Nortel could be sizeable, particularly after the recent brief, but powerful short-covering rally of Nortel.
Notablecalls: Looks like more trouble in store for Nortel (NYSE:NT). Note that another WiMAX vendor, Alvarion (NASDAQ:ALVR) is already down in pre-market action.
It’s a little strange how there is no word on early Mobile WiMAX handsets by November 2007 – Avian's discussions with certain hardware vendors at the recent CTIA conference has lead them firm to believe that development of Mobile WiMAX phones has been slower than anticipated. The early service may well have to depend on laptops with internal WiMAX connectivity or PC cards sold separately. This market is already being addressed by Verizon and several other mobile operators and it’s not clear that it’s large enough to offer much nourishment to Mobile WiMAX players.
Nortel (NYSE:NT) and Alcatel Lucent (NYSE:ALU) were badly beaten in the 3G mobile infrastructure competition; the revenue growth hopes of their mobile network units in 2008-2010 rest largely on strong early ramp-up of global Mobile WiMAX orders. America is the focus of the entire global WiMAX market – the Sprint launch of the service is the most important early roll-out in the world.
According to Avian, the blow-up of the Sprint-Clearwire deal is an ominous sign – there is a chance that the new Sprint CEO might scale down WiMAX plans radically or scrap the project entirely. Needless to say, the impact on Alcatel Lucent and particularly Nortel could be sizeable, particularly after the recent brief, but powerful short-covering rally of Nortel.
Notablecalls: Looks like more trouble in store for Nortel (NYSE:NT). Note that another WiMAX vendor, Alvarion (NASDAQ:ALVR) is already down in pre-market action.
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