Sprint and Clearwire still working together

Sprint Nextel and Clearwire are still collaborating on building their Wimax networks and the companies have made significant headway on a roaming deal, Clearwire Chief Executive Ben Wolff said on Wednesday.

Wolff, who spoke at the company's analyst conference in Portland, Ore., stopped short of making any big partnership announcement with Sprint. And he declined to comment on a Wall Street Journal article published Tuesday that said Sprint was considering spinning off its Xohm network and combining it with Clearwire's network.

In July, Sprint and Clearwire said they would partner to build out their networks and commercialize the service. But Sprint ditched the deal in November, after shareholders had ousted Sprint CEO Gary Forsee.

Wolff said Wednesday that the two companies never stopped talking even after their partnership had been dissolved. He said the companies have been working closely to align the architectures of their networks and to help ensure that people can roam from one network to another.

"If we weren't aligned on features and functionality, roaming would be difficult," he said. "So having alignments is a big step."

He also said the companies have been doing joint interoperability testing with device makers.

"All the information gathered from our trial in Portland is being shared with Sprint," he said. "And Sprint is sharing information about their trials with a level of cooperation that moves the ball forward faster."

To demonstrate the collaborative strides the companies have made, Wolff made a VoIP (voice over Internet Protocol) phone call to Sprint CTO Barry West. The call went over Clearwire's WiMax network in Portland and ended up in Northern Virginia on Sprint's WiMax test network at the company's headquarters.

The fact the companies are still talking and working together offers some hope that a Xohm spinoff could be in the works. Many analysts believe that Clearwire, which was started by wireless pioneer Craig McCaw, needs to combine its network with Sprint to survive.

"Without a spinoff and Sprint's footprint, Clearwire is dead," said Patrick Comack, an analyst with Zachary Research. "And I don't think Sprint shareholders want the company betting the farm on this technology.

Sprint would benefit from spinning off its network too, because it wouldn't have to dish out the $5 billion that it initially projected it would spend to build the network. Instead it could focus on getting its core cell phone business back on track. Comack believes the deal could be structured in such a way that, if WiMax is a success, Sprint could lease back the service for its customers. And if it's a failure, Sprint would still have time to use a competing technology, LTE, to build its 4G network. AT&T and Verizon Communications have already said they plan to use LTE to build their next-generation networks.

"Sprint needs to clean itself up and focus on running a regular 3G wireless company before they start focusing on building a 4G network using unproven, futuristic technology," Comack said. "The WiMax network should be off Sprint's balance sheet, and then the Gary Forsee nightmare will be over."