After months of slipping subscriber numbers and investor pressure, Gary Forsee stepped down as CEO of Sprint Nextel. Among investors' biggest concerns was the company's plan to build a next-generation wireless network using WiMax. While analysts say Sprint should table the WiMax rollout, such a move could hurt the already struggling company.

Gary Forsee’s resignation as the chairman, president and CEO of Sprint Nextel could have ramifications on at least a couple of levels: It almost certainly signals a change in how aggressively the carrier executes its stated WiMax strategy. That, in turn, would have a major impact on the overall success of the next-generation platform.

Many of the issues are delineated in this insightful CNET piece by Marguerite Reardon. The main concern, and probably the top reason that Forsee was pressured to leave, is that Wall Street thought WiMax was too speculative to justify the money and attention being paid by Sprint, especially as efforts to fully integrate Nextel lagged. The plan - as of right now - is to budget $5 billion over the next three years to build a WiMax network. About $2 billion of that would be spent by the end of next year to offer the service to 100 million people. That’s all up in the air right now, no pun intended.

The bulk of Reardon’s analysis details the impact the change may have on Sprint. In the bigger picture, however, a move away from WiMax by Sprint could chill enthusiasm, at least to some degree, across the industry. Sprint and Intel clearly are the highest-profile WiMax champions.

WiMax won’t fade away, of course. Intel, as Reardon points out, is planning to embed WiMax functionality in millions of devices, for instance. But a pullback by the carrier, even if it can be spun as being more about Sprint’s internal machinations than the potential of the technology, is not good news for WiMax proponents.

The Clearwire/Sprint network deal also seems to be in trouble. This is spelled out starkly in this comment by Goldman Sachs analyst Jason Armstrong in a Financial Times piece. It is likely that similar messages are being sent directly to the company's caretaker leadership:

We would expect longer-term initiatives such as the Clearwire WiMax partnership to be [put] on hold and subject to review by a new leadership team.

The cracks in the Clearwater/Sprint relationship are further evident in this article in The Seattle Times. The piece says the actually signing of the agreement is taking longer than expected to come to pass, but it's still expected to be signed within a few weeks of the Oct. 6 publication of the piece. But, with Forsee gone and the WiMax skeptics ascendant, it is not outside the realm of possibility that the deal will be put on the back burner.

The picture was not without clouds for WiMax before Forsee's departure. This sobering look at WiMax at PC Magazine begins by suggesting that the Clearwire/Sprint deal may have been struck more out of weakness - limited market opportunities - than strength. That’s speculation, of course. What isn’t is the fact that Clearwire’s positioning as a WiMax provider is a bit misleading. It certainly intends to use the technology, but currently serves its customers — outside of a small pocket in a Hillsboro, Ore. beta test — with other technologies. Perhaps the most disturbing aspect of the story, which was published last month, was the suggestion that Sprint “could be the technology’s saving grace.” If Reardon and others’ speculation proves accurate, that potential saving grace is fading.

All is not lost for WiMax, however. It still has powerful proponents. First and foremost is Intel, whose proselytizing goes beyond its product road map. For instance, last month it joined Wireless Broadband Planning K.K., a joint venture that will seek a license from the Japanese government. Other members of the group are carrier KDDI, Kyocera, Daiwa Securities Group, the East Japan Railway and the Bank of Tokyo-Mitsubishi. Intel also signed an agreement with Nokia and Nokia Siemens Networks to test for interoperability across its silicon. Nokia said it will use Intel's “Baxter Peak” WiMax silicon in its coming Nseries tablet PCs.

WiMax remains a technology with tremendous potential. What remains to be seen is whether those who back it are savvy enough to work through the tricky competitive landscape and enable it to realize the bright future that has long been predicted.

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