labels: Telecom
Sprint Nextel, Clearwire combine forces to 4G wireless internet news
02 December 2008

Benjamin G Wolff, Chief Executive Officer, Clearwire CorpClearwire Corp. and Sprint Nextel Corp. have completed a deal to combine their next-generation wireless Internet operations.

Sprint and Clearwire had said they would roll out Sprint's mobile WiMax Internet network, which is expected to reach as many as 140 million people, within 30 months of the deal's approval. Clearwire already has about 400,000 customers on a network that uses similar technology. The new company will absorb Sprint's existing Baltimore-area WiMax network, which the company developed under the XOHM brand, in addition to Sprint spectrum covering much of the country.

At the close of trading Friday, Sprint's shares added 11.6 per cent to $2.79 and Clearwire's were up 9.8 per cent at $6.62. Clearwire gained 1.4 per cent in post market trading.

Earlier this year Sprint sold its WiMax business to Clearwire as part of their 4G venture, valued at an estimated $14.5 billion, which would combine all the spectrum licenses owned by the two companies into a new firm, Clearwire, allowing Sprint to retain its cellular business and third-generation (3G) data network. The new venture includes an infusion of over $3 billion in cash from Google, Intel, and several cable operators.

Intel Corp., Google Inc., Comcast Corp., Time Warner Cable Inc. and Bright House Networks collectively invested $3.2 billion in the new company, which will retain the Clearwire name. Sprint will hold around 51 per cent of the firm, existing Clearwire shareholders will own 27 per cent and the new investors will hold 22 per cent.

Benjamin G Wolff will continue as Clearwire's chief executive officer, and Perry Satterlee continues as the company's chief operating officer. Sprint's two most senior WiMAX leaders have joined Clearwire's management team. Barry West, who served as Sprint's chief technology officer and XOHM business unit leader, is now president and chief architect of Clearwire, and Atish Gude, formerly senior vice president of Sprint's XOHM mobile broadband operations, is now senior vice president and chief marketing officer of Clearwire.

"As we roll out our network across the country, people will no longer have to make the choice between speed and mobility. We are bringing a new mobile Internet experience to customers at speeds previously relegated to fixed locations," said Wolff, CEO of Clearwire.

"With significant spectrum holdings yielding unmatched network capacity, a next-generation all-IP network, and an open Internet business model, Clearwire will deliver a simple value proposition aimed to improve productivity and make the Internet experience more enjoyable, wherever our customers happen to be,'' he added.

"This is the beginning of a new chapter in wireless that leverages Sprint's investment in 4G to profoundly change how people and businesses send, receive and use information," said Dan Hesse, CEO of Sprint and member of Clearwire's Board of Directors. "As the largest shareholder in Clearwire, Sprint is uniquely positioned to provide customers with both the largest and most dependable 3G network in America and access to the nation's first 4G mobile broadband network."

Clearwire chairman Craig O McCaw said, "This is not simply about a time-to-market advantage, but about having an amazing block of spectrum that is unencumbered by legacy commercial uses and technology. It is a chance to do something right the first time, with simplicity and incredible efficiencies. We are building a wireless broadband network that will stand the test of both time and competition. This is far and away the most exciting opportunity in wireless I have seen since the beginning of cellular in 1983."

Sprint, which has been struggling as its subscriber base continues to fall, has considered several strategies to catch up with rivals AT&T Inc. and Verizon Communications Inc., including jettisoning the Nextel network or selling its long-distance network (See: Sprint may divest Nextel's iDen business

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Sprint Nextel, Clearwire combine forces to 4G wireless internet