WiMAX Provider Sues Sprint/Clearwire

By Judy Mottl

January 07, 2009

A Texas WiMAX service provider has filed suit against Sprint Nextel and Clearwire claiming the carriers have infringed on six of its communications-related patents.

A Texas WiMAX service provider has filed suit against Sprint Nextel and Clearwire claiming the carriers have infringed on six of its communications-related patents.

Adaptix is seeking a jury trial, as well as unspecified damages. Reports of its civil suit, which was filed December 1, 2008 in U.S. District Court for the Eastern District of Texas, began to surface late last week.

Sprint and Clearwire are in the midst of a $14.5 billion joint effort to build a nationwide WiMAX network. Susan Johnston, a Clearwire spokesperson, said the company does not comment on legal actions. Donald Puckett, of The Ware Firm representing Adaptix, did not return calls.

The legal headache adds to Sprint's expanding list of woes despite its historic effort in launching the first "4G" network in Baltimore, MD in September (2008) and the second this week in Portland, OR.

In early December, the carrier was reportedly initiating a volunteer employee buy-out effort to reduce labor costs and also announced it was closing call centers for both cost savings and efficiency reasons.

During its November earnings call, Sprint CEO Dan Hesse acknowledged the carrier had not yet turned the corner in reviving its wireless data revenue streams. It reported third quarter revenue of $8.8 billion--a three percent drop from the previous quarter--which led to a net loss of $326 million, or $0.11 per share. That's compared to a $64 million profit and $0.02 per-share profit for the same period a year ago.

The carrier's hefty investment in WiMAX has some industry analysts questioning the network strategy. Hesse has remained bullish even though he announced its cost will be higher, noting another $2 billion will be needed.

Betting on WiMAX

The nation's third largest wireless carrier is banking that WiMAX will boost its 51.9 million customer base. It also hopes it will shore up its declining subscriber base and market hold, and push it ahead of market leaders AT&T and Verizon Wireless, which have put their "4G" bets on the competing Long-Term Evolution (LTE) standard. LTE also promises faster and cheaper Internet services.

To date, the venture has received $3.2 billion from big-name investors including Clearwire, Comcast, Intel, Time Warner Cable, Google, and cable provider Bright House Networks.

Sprint handed over its spectrum and WiMAX-related assets, for an investment valued at $7.4 billion. The investment by Clearwire is valued about $3.9 billion. Sprint owns 51 percent of the new company, which has dubbed its WiMAX service, "Clear."

In its suit, Adaptix is also seeking a permanent injunction keeping the defendants from further infringing on what it says are its patents, according to the complaint.

Article adapted from InternetNews.com.



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