In what could represent a major setback for the WiMAX mobile standard, Sprint Nextel and Clearwire have called off plans to create a US nationwide network after the two companies failed to reach a final agreement on terms of the transaction.

Back in July, Sprint and Clearwire announced an agreement to build the WiMAX network in the US, which they hoped would reach 100 million users in nineteen major cities by the end of 2008. The decision to call it quits follows the departure of Sprint CEO Gary Forsee, who made a big bet on WiMAX, but many investors viewed the $5 billion-plus project as an unnecessary distraction in light of the carrier's poor results in its core wireless phone business.

Despite breaking off its agreement with Clearwire, Sprint said it's still committed to WiMAX - to what extent is not certain. I wonder how a slowdown in the rollout of WiMAX could hurt companies backing the technology such as Intel, which plans to fit WiMAX chips into laptops by mid-2008 in an effort to push the wireless technology into the mainstream.