• The Wall Street Journal, Thursday, June 14, 2007 11 AM

It's been hinted, but telecom giant Sprint Nextel, which has taken a leading role in the development and deployment of WiMax technology, could soon form an alliance with WiMax pioneer and competitor Clearwire. WiMax promises the delivery of broadband wireless technology over huge areas using a single access point.

But it's seriously expensive to build, which is why Clearwire is continuously in need of funding. About a year ago, Intel Capital, the investment arm of the semiconductor giant, provided $600 million of a whopping $900 million round of private funding for the WiMax provider. The unprofitable company, which has just 258,000 customers in 38 U.S. markets, has seen its stock drop 20% since going public in March.

Sprint, meanwhile, will have dumped $3 billion into its WiMax project as of next year. However, the move never received a full vote of confidence from Sprint's management, and the company will now likely spin off the unit-presumably to Clearwire. The telecom would then join forces with the new owner, expanding both companies' reach and adding to Clearwire's subscriber base. Another option for Sprint, if it decides to keep the unit, would be to partner with leading cable operators, seen as a potential source of cash and understood to be interested in licensing WiMax spectrum for its Internet customers.

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