Sprint (S) has been gambling that the next generation of cell service in the US can be driven by WiMax technology. With help from tech heavyweights including Motorola (MOT) and Intel (INTC), Sprint is spending $3 billion on a WiMax network that will reach 100 million people in this country. WiMax is already used in several developed countries like South Korea.
One of the major obstacles to the success of Sprint’s plan has been the roll-out of 3G networks that are based to large extent of Qualcomm’s (QCOM) broadband chip-sets and MediaFlo wireless multimedia delivery systems. The ruling blocking imports of phones with these chips may give Sprint an important opening.
Sprint needs all of the help it can get. As it has struggled with its NexTel merger and subscriber numbers have been moribund, Its stock has dropped almost 10% over the last two years. AT&T’s (T) stock is up 70% over that period and Verizon’s (VZ) is up 20%.
If Qualcomm’s problems drag on, it may buy Sprint the time to get up its initial WiMax deployments, and, if cell customers warm to the new tech, the battered company could be on its way back.
Douglas A. McIntyre can be reached at [email protected]. He does not own securities in companies that he writes about.
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