Sprint Ends Pact to Offer Fast Network

The Sprint Nextel Corporation said yesterday that it had ended its WiMax partnership with the Clearwire Corporation and was reviewing its plans for the next-generation wireless technology.

WiMax promises faster wireless connection speeds over longer ranges than Wi-Fi, currently used in laptops, but its commercial and technical viability is still unproven.

The news sent shares of Clearwire, a small high-speed wireless service provider, down 25 percent. Clearwire, founded by the mobile pioneer Craig O. McCaw, also posted a quarterly loss yesterday that was five times wider than a year earlier as expenses rose.

Sprint said it still intended to build a WiMax network, but was reviewing its business plan and outlook in light of the partnership failure. It promised more details early next year.

Analysts said the company would probably not make any big decisions on WiMax until it hires a chief executive to replace Gary D. Forsee, who resigned last month.

A Pacific Crest analyst, Steve Clement, said the demise of the Clearwire pact was a step in the right direction for Sprint. “It raises the probability they’re not going to spend as much on WiMax,” he said. But he added: “There’s not enough certainty within Sprint right now to get too excited.”

Sprint said it and Clearwire had failed to agree on the terms of the transaction. They agreed in July to connect their WiMax networks and share the cost of reaching a potential customer base of 100 million people by the end of 2008.

The agreement would have helped Clearwire offer a wider-reaching service at a lower cost by giving customers access to services in larger Sprint markets.

“It’s not good news for Clearwire,” said Chris King, an analyst with Stifel Nicolaus. In a research note he said it “dramatically impacts the longer-term financial pressures on Clearwire.”

Clearwire executives told analysts on a conference call that it was looking at options, including strategic partnerships with companies besides Sprint.

Shares of Clearwire, which is based in Kirkland, Wash., fell .54, to .49. Shares of Sprint, based in Reston, Va., fell 23 cents, to .31.