Sprint's economic woes could force WiMAX cutbacks

When a large company starts talking about consolidation and refocusing in attempts to gain market share on competitors, that usually means layoffs and corporate restructuring will be part of its efforts. Last year, Sprint Nextel laid off 5,000 workers in efforts to save money that could be used for other company needs.

Sprint is currently the nation’s third largest mobile phone carrier and is reported to lag well behind number one AT&T and number two Verizon. Some blame Sprint’s subscriber woes on poor customer service, but Sprint says the general economic downturn in the U.S. is partly to blame.

Sprint Nextel Corp. CEO Dan Hesse is expected to announce a new round of layoffs at Sprint rumored to affect roughly 2,000 employees. The Wall Street Journal Online reports that Hesse and other executives are considering moving about 200 of Sprint's top executives to the Sprint headquarters in Overland Park, Kansas. These employees currently work from the former Nextel corporate headquarters in Reston, Virginia.

Reports also claim that Sprint may be considering a roll back of its WiMAX plans to cover fewer subscribers as a way to cut the $5 billion USD cost of setting the WiMAX network up. Sprint had said it expected to reach 100 million subscribers with WiMAX service this year, but that number could reportedly be cut by as much as 30% to save costs.

WiMAX is a next generation wireless data service that promises data speeds on par with wired broadband connections over large distances, Sprint calls its WiMAX service Xohm. ASUS recently announced that its second generation Eee PC would support WiMAX.

"Paying an extra $500 for a computer in this environment -- same piece of hardware -- paying $500 more to get a logo on it? I think that's a more challenging proposition for the average person than it used to be." -- Steve Ballmer

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