Sprint Nextel and Clearwire Partner on WiMAX Network
Posted by Jesse Ward on Monday, May 12, 2008 · 
·
· 
Sprint Nextel and Clearwire announced last week that they have entered into a definitive agreement to merge their mobile WiMAX networks and resources. Industry heavyweights Intel Corp., Google Inc., Comcast Corp., Time Warner Cable Inc. and Bright House Networks have collectively agreed to invest $3.2 billion into the new company.
The new company, called Clearwire, expects to offer mobile wireless Internet services on a broad array of new devices that will be made possible by integrated WiMAX chipsets, scalable operating expenses and a commitment to an open architecture. The company is targeting a network deployment that will cover between 120 million and 140 million people in the United States by the end of 2010.
Equity: Sprint will contribute all of its 2.5 GHz spectrum and its WiMAX-related assets and intellectual property in exchange for the largest stake in the new company, with approximately 51% equity ownership. Meanwhile the existing Clearwire shareholders will own approximately 27%, and the new strategic investors, as a group, will acquire approximately 22% for their investment.
Intel: Intel will work with manufacturers to embed WiMAX chips into laptops and other Intel-based mobile devices.
Google: For its part, Google will partner with the new Clearwire in the development an open Internet business model. The new Clearwire will support Google’s Android operating system in its future offerings. In addition, Google will be the search provider and a preferred provider of other applications for the new Clearwire. In addition, Google will become the default provider of Web and local search services on Sprint’s network. Sprint also will preload several Google services – including Google Maps for mobile, Gmail and YouTube – on select mobile phones.
MVNO Agreements: As part of the venture, Comcast, Time Warner Cable, Bright House Networks and the new Clearwire will enter into 3G MVNO wholesale agreements with Sprint, becoming bundled providers of Sprint’s wireless service, however the service will be resold under their own brand names. Once the WiMAX network is built, Sprint, Comcast, Time Warner Cable and Bright House Networks will become MVNOs on the Clearwire network.
Leadership: The new company will include staff from both the existing Clearwire and Sprint Xohm business unit. Clearwire CEO Ben Wolff will be the CEO of the new Clearwire, while Barry West, Sprint’s CTO and Xohm business unit leader, will be the president.
The transaction has been approved by all of the parties’ boards of directors, and is expected to be completed during the fourth quarter of 2008, providing the FCC gives its approval.
Related posts: