SK and Sprint: Implications for Sprint Wireline?

July 16th, 2008 by · Leave a Comment

Unstrung has an article today about the SK/Sprint talks that are supposedly going on, with an interesting comment on the future of XOHM. Specifically, they note that SK Telecom has a experience and interest in Wimax, and the relationship with Clearwire may be integral to what is going on here.

That is quite reasonable of course, but I think there are also implications to Sprint’s wireline business.  An SK buyout or minority investment would, IMHO, increase the likelihood that Sprint could sell or spin off its wireline business to focus solely on wireless. Sprint’s wireline business has been treading water for a long while now, and that doesn’t seem likely to change anytime soon – monetizing it is starting to make more and more sense.

Sprint announced just the other day that they will deploy Cisco 40Gbps IP over DWDM gear as part of a network overhaul, but they would have to do that anyway whether it gets spun off or not.  The bottom line is that their fiber is old, and leveraging their customer base to get it onto newer, plentiful fiber (e.g. Qwest) is only going to get harder.

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Categories: Internet Backbones · Mergers and Acquisitions

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