Clearwire & Sprint Deal

Clearwire-Sprint: Done Deal

Posted by Sam Churchill on November 28th, 2008

Clearwire and Sprint Nextel announced today that they have completed the transaction to combine their next-generation wireless Internet businesses. With the closing, Sprint contributed all of its 2.5 GHz spectrum and its WiMAX-related assets, including its XOHM business, to Clearwire. In addition, Clearwire has received a $3.2 Billion cash investment from Comcast, Intel, Time Warner Cable, Google and Bright House Networks.

The transaction with Sprint and the new cash investment were completed on the terms originally announced on May 7, 2008. The new company retains the name Clearwire and remains headquartered in Kirkland, Washington. The deal (pdf), announced in May, will provide funding for Sprint and Clearwire to build the network and allow cable providers to offer wireless services to help them compete with rivals AT&T and Verizon. It will use Sprint’s existing broadcast wireless towers and its wired fiber network.

On Monday, December 1, 2008, at 10 a.m. Eastern Time (7 a.m. Pacific Time), Clearwire will hold a conference call for press and industry analysts to share its perspective and provide other details about the new company.

Sprint, which had earlier said they’d spend some $5 billion by 2010 building their WiMAX network across the United States, will now own about 51 percent of the new company. Sprint’s new partners will invest some $3 billion. Clearwire will own about 27 percent. Comcast, Time Warner Cable, Intel, Google and Bright House will get a combined 22 percent.

The partners have put the value of the deal at $12 billion, a figure that includes radio spectrum and equipment provided by Sprint Nextel and Clearwire, and the $3.2 billion invested by the partners.

Clearwire will be the only company allowed to sell 4G access as a standalone service, according to Sprint CTO Berry West. Sprint will essentially access the network as a mobile virtual network operator (MVNO), selling combined 3G and 4G access plans. Clearwire CEO Ben Wolff told the Seattle Times that, ultimately, the company could “get to 20,000 or 30,000 employees” nationally. Clearwire has about 2,000 employees now, including 350 to 400 at its Kirkland headquarters. Sprint has about 700 in its WiMax unit, including a research and development group in Herndon, Va.

Clearwire’s next rollout is expected to be in Portland, Oregon, early next year, where the company has been testing the system with partner Intel for the last year.

Analysis by Juniper Research indicates up to 12% of the global DSL installed base will be substituted by WiMAX by 2013. The Far East will lead with over one fifth of the 47 million subscribers in 2013.

The combined Mobile WiMAX network is expected to cover 120-140 million people in the U.S. by year-end 2010.

source : dailywireless.org