Skip to main content

Business > News

Wednesday, 07 May 2008 Sprint, Clearwire, others set to announce deal

US to see critical WiMax deal?

Nancy Gohring

Leading companies across industries, including Comcast, Google, Intel and Time Warner, have agreed to invest in a joint venture between Sprint Nextel and Clearwire that is expected to be announced very soon, according to a report from the Wall Street Journal (WSJ) on Tuesday.

Rumors of a deal involving all of the companies have been circulating for months. The combination of valuable wireless spectrum that Sprint and Clearwire own promises to create a company that can offer cutting-edge broadband services across the United States and further afield. The deal also promises to offer a much-needed boost to struggling Sprint and breathe new life into WiMax.

Clearwire already offers broadband wireless in 50 markets in the US and three European countries. Sprint has just begun launching networks, with soft launches in Chicago and the Baltimore-Washington area.

Participation from Time Warner means that the company can contribute valuable content for delivery to users, noted Nadine Manjaro, an analyst with ABI Research. She also said that Google, with its reputation for innovation, is a valuable participant in the new company.

"This would be really huge for WiMax," she said. WiMax is the wireless technology that Sprint is using to deliver services. Clearwire is currently using a proprietary but similar technology because it began launching service before the WiMax standard was set.

Delays in Sprint's rollout combined with growing momentum behind another wireless standard, LTE (Long Term Evolution) - backed by some competing operators - has put a damper on the WiMax industry lately. "This could finally push it over the hump," Manjaro said.

The deal could also help "put Sprint back on track," Manjaro said. The company has struggled recently, particularly with integration after its acquisition of Nextel.

Comcast has agreed to contribute $1.05 billion, Intel promised $1 billion, and Time Warner Cable and Google plan to add about a half a billion each to the deal, according to the WSJ. A small cable company, Bright House, also plans to contribute $100 million, the WSJ reported.

Clearwire's CEO, Ben Wolff, would run the new company, and Craig McCaw would continue to serve as chairman, according to the WSJ. That may leave little room for a leadership position for Barry West, the head of Sprint Nextel's WiMax venture. However, he had been hinting at retirement before taking on his most recent role, so perhaps he'll do that now, Manjaro said.

What is this?

<<prev article | back to news index | next article>>

Latest News


More news...