The business stories that matter, by Fortune's Colin Barr
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January 29, 2008, 1:54 pm

Sprint talks heat up Clearwire

Clearwire (CLWR) surged Tuesday on reports that the wireless company’s partnership with Sprint Nextel (S) may be resurrected. The Wall Street Journal reported that Sprint has resumed talking with Clearwire about a deal that would bring in outside players such as Intel (INTC) to fund a high-speed network using WiMax technology. The reversal comes just two months after Sprint backed away from an earlier plan to team up with Clearwire on a WiMax project. As Fortune’s Stephanie Mehta pointed out two months ago, the technology has been heavily hyped but so far little deployed. Yet given Sprint’s desperate straits — the company has been losing postpaid wireless subscribers at an alarming clip, and new chief Dan Hesse is expected to roll out another round of layoffs next month — reviving the Clearwire deal makes sense. Sprint, after all, would get help building a service that could help it compete with rivals AT&T (T) and Verizon (VZ) — while buying Hesse time to fix the free-falling cell phone service business. As for Clearwire, it continues to combine the promise of a new wireless technology with the economics of a classic dot-com — so don’t be surprised if Tuesday’s rally fades in coming days.

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Colin Barr covers business and finance for Fortune.com. Previously he was an editor at TheStreet.com and author of the weekly Five Dumbest Things on Wall Street column, and an editor at Dow Jones Newswires.
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