Telecommunications exchange traded funds were disconnecting Friday as Sprint Nextel (NYSE: S) shares dropped nearly 20% and Clearwire Corp. (NasdaqGS: CLWR) was down over 30%.
The iShares Dow Jones US Telecom (NYSEArca: IYZ) was down 1.2% at last check. Other ETFs tracking the sector include SPDR S&P Telecom ETF (NYSEArca: XTL), Vanguard Telecommunications (NYSEArca: VOX) and Telecom HOLDRs (AMEX: TTH).
Sprint announced Friday that it will no longer use Clearwire Corp.’s network by the end of next year as the company switches to its own fourth-generation data network, reports Peter Svensson for the Associated Press. Spring is Clearwire’s largest customer and covers its “Sprint 4G” devices under Clearwire’s network.
Joseph Euteneur, Sprint’s finance chief, said that the company may need to turn to the capital markets for credit as it changes course on its 4G network strategy, reports Greg Bensinger for WSJ.com.
Sprint shares fell after the company did not specify how it expects the iPhone 4S to generate revenue now that the company is carrying the iPhone device. So far, the company only hopes that the new iPhone will help maintain and attract customers.