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Sprint Nextel joins forces with Clearwire over Wimax

Sprint Nextel and Clearwire have recommitted to their mobile Wimax
project with an array of additional strategic investors brought in to
increase the project’s chances of success.

The companies have agreed to combine their mobile broadband businesses and create a company focussed on deploying a nationwide mobile Wimax network. The newly formed company will be called Clearwire and has Intel, Google, Comcast, Time Warner Cable and
Bright House Networks making a combined $3.2 billion investment in the company. Sprint will be the largest shareholder in the company with a 51% stake. Clearwire will have a 27% stake in the company, with the remaining five investors holding a 22% stake.

“We expect this transaction to enhance competition and thus be approved by the FCC. New Clearwire will deploy more services, more quickly, and at lower costs than Sprint and Clearwire could alone,” said John Polivka, representative for Sprint Nextel. “New Clearwire will enter
the market during a high-stakes period of competition against larger, more powerful competitors that are owned or controlled by dominant incumbent local exchange carriers that control millions of access lines.”

Benjamin Wolff, CEO of Clearwire, said: “The combination of robust next-generation mobile Wimax technology and nationwide spectrum that we believe is optimal for delivering mobile broadband services – coupled with substantial new financial resources, a team of experienced wireless industry veterans, and distribution and technology agreements with some of our nation’s leading communications, technology and content companies – creates what I believe to be a once-in-a-lifetime opportunity.”

The new Clearwire is targetting a network deployment that will cover between 120 million and 140 million people in the US by the end of 2010. Clearwire’s strategic investors have established commercial relationships that will give them direct access to the network’s
customers and capabilities.

Google will partner with the new Clearwire in the development of internet services, advertising services and applications for mobile Wimax devices. The company will also be the search provider and a preferred provider of other applications for the new Clearwire’s retail product.
Sprint and the cable companies will enter into wholesale agreements with the new Clearwire, becoming 4G providers of new Clearwire’s mobile Wimax service.

The project is loaded with potential but the industry will have to wait and see if Clearwire can deliver on its promises and bring a nationwide mobile Wimax network to the US market.

See backhaul p88

Published June 2008

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