WiMax Goosed

Companies Are Putting $3.2 Billion Into a New Company That Craig McCaw's Clearwire and Sprint Nextel Are Forming

Jun. 5, 2008 05:00 AM

For a 22% interest, Intel, Google, Comcast, Time Warner Cable and Bright House Networks are putting $3.2 billion into a new company that Craig McCaw’s Clearwire and Sprint Nextel, two of the walking wounded, are forming that combines their WiMax wireless broadband businesses.

Trilogy Equity Partners is investing directly.

The deal protects Intel’s existing $620 million investment in Clearwire – on top of its many other WiMax-related investments – and scratches its WiMax itch – it’ll be putting WiMax chips in laptops and MIDs.

Intel’s first WiMax-laden Centrino 2s are due in a few weeks and it’s got the either/or Wi-Fi/WiMax Montevina set for later this year.

It also presumably helps Intel get into phones.

Google will get another advertising, applications and services outlet – including search – and a chance to reinforce its Android operating system for phones. Google is supposed to co-develop the venture’s open Internet protocol for mobile broadband devices.

The new company, 51% owned by Sprint, will be called Clearwire and is supposed to see about the first deployment of a high-speed US-wide 4G WiMax network.

Existing Clearwire shareholders will own 27%. Intel will kick in a billion giving it ~10%, Google $500 million, Time Warner $550, BrightHouse $100, Comcast $1.05 billion and Trilogy $10 million. The total transaction value works out to $14.5 billion.

The deal is supposed to close in Q4, pending approval of the FCC, Hart-Scott-Rodino clearance and the blessings of Clearwire stockholders.

McCaw is expected to serve as non-executive chairman. Clearwire CEO Banjamin Wolff is supposed to keep that job and Sprint CTO Barry West is supposed to be president.

Clearwire had 400,000 wireless users at the end of last year.

Deployment is expected to cover between 120 million and 140 million Americans by the end of 2010. Figure the top 200 markets. It will use Sprint’s towers, fibre network and IT support.

Comcast, Time Warner and Bright House will be resellers, starting with Sprint’s 3G wireless. And Sprint will pre-load certain phones with Google Maps, Gmail and YouTube.

WiMax’ rival is a technology called Long-Term Evolution (LTE), which Verizon Wireless and AT&T, the companies that bought most of the old radio spectrum, are pushing. It’s supposed to have about the same performance as WiMax: 2 Mbps-5 Mbps. So it’s a horserace. Clearwire just has to hold together and execute.

The current Wi-Fi wireless technology is slow and range-constricted.

Published Jun. 5, 2008— Reads 2,729
Copyright © 2008 SYS-CON Media. All Rights Reserved.

About Maureen O'Gara
Maureen O'Gara is the Virtualization News Desk editor of SYS-CON Media. She is the publisher of famous "Billygrams" and the editor-in-chief of "Client/Server News" for more than a decade. One of the most respected technology reporters in the business, Maureen can be reached by email at maureen(at)sys-con.com or paperboy(at)g2news.com, and by phone at 516 759-7025.

WIRELESS BUSINESS & TECHNOLOGY LATEST STORIES . . .

New Testing Approaches for Mobile Phone Quality

By Charlie Baker

Unlike wireline service, mobile phones rely on often precarious over-the-air radio transmissions to carry time-sensitive voice traffic. Add to this the transforming of voice calls into IP-routed traffic; microphones and speakers disconnected from the device via Bluetooth; high-bandwidt...

RFID Prospering at All Levels

By Peter Harrop

While the RFID orders for half a billion dollars grab the headlines, RFID is in fact prospering at all levels. Consider the flood of orders at the one million dollar level, spread across the world. On Track Innovations has just supplied 1.5 million RFID cards to the Warsaw Transport De...

Dale and Thomas Leverages Wireless Warehouse

By Norm Steiner

Dale and Thomas Popcorn manufactures and distributes gourmet popcorn products in a wide variety of flavors such as chocolate and peanut butter, cheddar chipotle, and toffee crunch. At Dale and Thomas Popcorn, they do everything possible to ensure every item they ship arrives in perfect...

Does the iPhone Over-Use Numeric Status Indicators?

By Dave Meeker

I am a fan of my iPhone. I am still using my "old" first generation iPhone and am thrilled that I am now able to run custom applications on the device without having to Jailbreak it first. This is good stuff. I did notice something today that concerns me though. It's about the use of a...

Opinion: Do Google Android Mobile Apps Lack Consistency?

By Remy Porter

I love Open Source. It's a great way to develop software. But it has its weaknesses. One of the main weaknesses is consistency. Take a look at these Android apps. When you look at these applications for the Google-backed smartphone OS, what you'll see is a complete lack of consistency ...