Bit Rate

Sprint: No News Is No News

4/02/2008 5:34 AM

We’re still stuck pontificating what cable’s next wireless move will be.

Sprint CEO Dan Hesse, in his keynote at CTIA Wireless 2008 yesterday, did not announce that Comcast, Time Warner Cable and Bright House will be funding a JV for WiMax wireless broadband service.

The non-news is worth noting because last week, The Wall Street Journal reported that the cable companies were considering pumping up to $1.7 billion into a joint venture run by Sprint and Clearwire. The paper also said Hesse was pushing to get the deal signed and sealed so he could have a dazzling deal to unveil at CTIA.

Didn’t happen. 

Is cable still at the negotiation table? Or did they decide to walk away, after seeing the negative reaction from investors to the trial balloon they floated? 

As Miller Tabak media analyst David Joyce told Multichannel News’ Mike Farrell, Comcast’s rumored $1 billion stake could wipe out the operator’s projected free cash flow growth for the year, if the cable giant contributed between $250 million to $500 million to the JV in 2007.

"The value investor got interested in Comcast again because of the dividend and because it looked like free cash flow growth was starting to emerge,” Joyce said. “This is something that could break that promise.”

Note, too, that cable’s Pivot experiment with Sprint has been dead on arrival. So why throw good money after bad with the same partner?

"The lack of an announcement raises questions about whether or not a deal will happen after all, and Hesse’s commentary around Sprint’s ongoing commitment to their Xohm WiMax network made no mention of potential partners," Sanford Bernstein analyst Craig Moffett wrote in a note. 

Here was one piece of news Sprint did announce yesterday: an "exclusive" touch-screen phone, the Samsung Instinct, that provides access to "most-used applications and contacts within a single finger tap." It is instantly recognizable as an iPhone wannabe.

Well, it’s probably a step in the right direction. As Moffett noted: "A weak handset line-up has also hurt Sprint over the past year."