RUMOR: CLEARWIRE DITCHING RETAIL; GOING WHOLESALE ONLY

According to a report in the Wall Street Journal, Clearwire plans to exit the retail business and become solely a wholesale WiMax (and perhaps someday LTE) operator. An anonymous source (potentially at Sprint, who benefits the most from the news) doesn't specify when exactly this will happen, though they say the company has no plans to shut their 140 stores "at the moment." Reuters, who also spoke to two anonymous insiders, notes that Clearwire is stuck in leases so they can't cut retail presence just yet -- but they can cut advertising costs and put that money toward funding network expansion:

One of the sources said that while it would be difficult for Clearwire to get out of lease agreements for its stores it could instead pull back in areas such as advertising in order to prioritize spending on expanding its network. "It's more about not putting any more investment into areas like new ads," the person said.

That may not necessarily be a bad thing. Clearwire hasn't shown they're a particularly good retail residential ISP, their fixed service suffering from poor reviews, and their new WiMax service fairing only somewhat better, with users complaining of inconsistent coverage, signal quality issues, and random service throttling.

The move could certainly be good news for Sprint, who would then operate as the sole retail arm of the network -- something Sprint executives have preferred all along. It could also be good for Clearwire, who could now see more funding from a happier Sprint. Clearwire and Sprint's relationship had been fracturing over the last few years, with indicates that Sprint might just go ahead and build their own LTE network. Those plans could be less likely under a Clearwire LTE/Mobile WiMax wholesale model with Sprint as the primary retail player.