Sprint to Build Wireless Network Based on WiMax

Sprint Nextel Corp. said Tuesday that it would use the emerging technology WiMax to build a high-speed wireless network.

The nation’s third-largest cellular provider said the network, expected to launch in some markets by late 2007, would provide customers with wireless Internet speeds on par with digital subscriber line and cable-TV modems and four times faster than speeds available on current wireless networks.

Gary Forsee, Sprint’s chief executive, said in a teleconference that Intel Corp. would supply equipment to build the network and that Motorola Inc. and Samsung Telecommunications America would develop WiMax-compatible phones and mobile devices.

Sprint expects to spend about $1 billion on the initiative in 2007 and $1.5 billion to $2 billion in 2008. Forsee didn’t specify to what extent the other companies might help offset Sprint’s costs, saying those details would come this year when Sprint provides financial guidance for 2007.

The costly initiative was announced less than a week after the company, formed last summer by the merger of Sprint Corp. and Nextel Communications Inc., reported a 38% drop in second-quarter profit.

The earnings report, which depicted a company struggling to attract and retain subscribers, sent Sprint Nextel’s shares to a 52-week low. That slide continued Tuesday, with the stock falling 31 cents a share to a new 52-week low of $16.63.

The WiMax plan also comes as Sprint is still rolling out its third-generation cellular data network.

Analysts were largely supportive of Sprint’s choice of WiMax but said it was a big gamble to invest heavily in a network aimed at data services.