Forsee out: Will Sprint still Xohm or is UMB back?
Thursday, October 11, 2007
Gary Forsee has resigned as the CEO of Sprint following heavy investor pressure. Sprint's voes with the iDen integration and the Xohm plans are seen as key reasons. While the Nextel iDen integration is stretching beyond the $2.8 billion initial budget, its WiMax plans have been a cause of worry for the investors.
The point is that Sprint is yet to completely monetize its CDMA infrastructure which runs to billions of dollars by itself. The carrier is also faced with churn issues. The investors' position is perhaps that the basic business plan should accommodate means to steady its current network and then look into the future. With the need to roll out the 2.5 GHz band, Sprint is faced with a double-edged sword.
It is quite possible that the new CEO will likely go with the investors. So, I can well see Sprint's investment in WiMax tapering off leading to an eventual spin-off. What this opens up is also an oxygen mask to UMB that just last month was dealt a severe blow with Verizon hinting at LTE. QualComm (QCOM) perhaps sees this as an opportunity to revive the long-term fortunes of the standard dominated by its IP.
With the other OFDMA standards being more even on the IP front, UMB presents QCOM an opportunity to retain its IP value while also having a dominating chipset market share. So, any small window of opportunity on this standard is good for the San Diego company. That is why I see this as a positive for QCOM.
The point is that Sprint is yet to completely monetize its CDMA infrastructure which runs to billions of dollars by itself. The carrier is also faced with churn issues. The investors' position is perhaps that the basic business plan should accommodate means to steady its current network and then look into the future. With the need to roll out the 2.5 GHz band, Sprint is faced with a double-edged sword.
It is quite possible that the new CEO will likely go with the investors. So, I can well see Sprint's investment in WiMax tapering off leading to an eventual spin-off. What this opens up is also an oxygen mask to UMB that just last month was dealt a severe blow with Verizon hinting at LTE. QualComm (QCOM) perhaps sees this as an opportunity to revive the long-term fortunes of the standard dominated by its IP.
With the other OFDMA standards being more even on the IP front, UMB presents QCOM an opportunity to retain its IP value while also having a dominating chipset market share. So, any small window of opportunity on this standard is good for the San Diego company. That is why I see this as a positive for QCOM.
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