Sprint Nextel said negotiations to build a wireless network with Kirkland-based Clearwire are taking longer than expected. The news pushed Clearwire...
Sprint Nextel said negotiations to build a wireless network with Kirkland-based Clearwire are taking longer than expected. The news pushed Clearwire shares down 13.7 percent Friday.
On July 19, Clearwire and Reston, Va.-based Sprint announced plans to sign a contract within 60 days. Sprint still anticipates completing work on an agreement in the next few weeks, spokesman James Fisher said Friday.
Sprint is facing investor discontent after network problems and an unsuccessful advertising campaign led to the loss of about 700,000 long-term subscribers in the past year. The company may hire new management and place less emphasis on the new network it planned to build with Clearwire, said Philip Cusick, an analyst at Bear Stearns in New York.
Clearwire shares fell $3.23 to $20.38 Friday after Cusick cut the stock to “peer perform.”
Most Read Business Stories
- Amazon Prime Day draws more than just shoppers looking for a deal; workers, critics and others weigh in
- Belltown condo building is a hive of Airbnb guests
- Amazon's Prime Day: 5 things to know before you shop
- We've just lived through the greatest period of restaurant growth in U.S. history. Here's why it's ending.
- How a tax loophole is helping tech company workers save millions
Earlier in the day, the shares declined to $19.90, the biggest drop since the company, founded by Craig McCaw, went public in March.
Cusick said in a research note that delays in signing a deal “will likely push out additional market launches” Clearwire has planned.
Talks have progressed more slowly than expected because the companies are developing “a new business, so it just takes time,” Fisher said. “Once you start going through detail after detail after detail, it just takes longer.”
Under the planned deal, the companies would build a wireless network more than five times faster than today’s standard, using WiMax technology. They plan to reach 100 million people with the service by the end of 2008.
Clearwire spokeswoman Helen Chung didn’t return a message seeking comment on the delays.