Sprint Nextel Cancels WiMAX Partnership with Clearwire

American mobile phone carrier, Sprint Nextel, has scrapped plans to partner with wireless broadband startup, Clearwire, on a nationwide WiMAX network.

The partnership was reversed after Sprint decided to dismiss its CEO, Gary Forsee, last month. The collapse of this partnership is being seen as a major blow to Clearwire, whose stock price dropped more than 25% yesterday, to close at $13.49 on the NASDAQ.

Clearwire’s losses have swelled significantly for the past three years, and its third-quarter sales totaled just $41.3 million, or less than one hundredth of Sprint’s.

“The Sprint deal was really good for Clearwire, and it’s bad that they lost that,” commented Jefferies & Co. analyst, Jonathan Schildkraut. “Clearwire will have to shoulder a bigger burden to get broader network coverage.”