For many telecom equipment suppliers, including Nortel, there has been a concerted strategic focus on Wi-Max given its potential to create high-speed wireless networks.
At the forefront of the Wi-Max “revolution” has been Sprint Nextel, which plans to spend $5-billion over the next three years – a staggering investment – to build a Wi-Max network in the U.S.
Sprint, however, is under growing pressure from the investment community given its weak financial performance, which pressured CEO Gary Forsee to resign (above left) earlier this week. Not surprisingly, one of the company’s projects under scrutiny is the Wi-Max network.
According to a CNet analysis story, “Wall Street analysts and investors say Sprint’s WiMax dreams are an unnecessary and dangerous diversion for the company, which is still struggling two years after the $36 billion Nextel merger to realize any of the cost savings that had been promised when the merger was announced.”
“They should stop the WiMax rollout immediately,” Patrick Comack, an equities analyst with Zachary Research told CNet. “They need to get back to the basics and learn how to run a wireless company. This means focusing more on the present rather than the future.”
I believe that Patrick Comack’s comments show an incredible lack of insight, and if the Sprint board were to follow the advice, it would contribute to Sprint’s ultimate demise.
Sprint knows how to run a wireless company. That isn’t their problem, IMHO. Sprint’s issue is that Verizon and AT&T are turning into two goliaths through mega-mergers and acquisitions. In order to combat this, Sprint needs to change the game and stay ahead, kind of like they did with their PCS program years ago. Remember pin-drop? An aggressive Wi-Max strategy is a great bet. Let’s speed it up, not slow it down. A major partnership with an Internet VoIP player (Skype, Vonage, maybe Google in future) might be another option. Instant access to 10s of millions of subscribers. In any case, Sprint definitely does not want to just slug it out with the titans. That’s a losing proposition.
Interestingly, there are a number of parallels with Nortel’s situation. Unfortunately, the Nortel leadership team appears to be littered with Patrick Comack clones.
Will Sprint Kill its Wi-Max Strategy?
For many telecom equipment suppliers, including Nortel, there has been a concerted strategic focus on Wi-Max given its potential to create high-speed wireless networks.
At the forefront of the Wi-Max “revolution” has been Sprint Nextel, which plans to spend $5-billion over the next three years – a staggering investment – to build a Wi-Max network in the U.S.
Sprint, however, is under growing pressure from the investment community given its weak financial performance, which pressured CEO Gary Forsee to resign (above left) earlier this week. Not surprisingly, one of the company’s projects under scrutiny is the Wi-Max network.
According to a CNet analysis story, “Wall Street analysts and investors say Sprint’s WiMax dreams are an unnecessary and dangerous diversion for the company, which is still struggling two years after the $36 billion Nextel merger to realize any of the cost savings that had been promised when the merger was announced.”
“They should stop the WiMax rollout immediately,” Patrick Comack, an equities analyst with Zachary Research told CNet. “They need to get back to the basics and learn how to run a wireless company. This means focusing more on the present rather than the future.”
For more, check out Broadband Reports.