Sprint, Clearwire to Merge Broadband Businesses

Clearwire and Sprint Nextel today announced plans to merge their broadband businesses to form a new wireless company. The new company, which will retain the Clearwire name, will focus on developing the country's first nationwide mobile WiMAX network.

The new Clearwire envisions bringing much faster service to a broad range of consumers including individual consumers, small businesses, medium and large enterprises, public safety organizations and educational institutions. According to Clearwire Chairman Craig O. McCaw, "The power of the mobile Internet, which offers speed and mobility, home and away, on any device or screen, will fundamentally transform the communications landscape in our country. We believe that the new Clearwire will operate one of the fastest and most capable broadband wireless networks ever conceived, giving us the opportunity to return the U.S. to a leadership position in the global wireless industry."

Sprint and Clearwire also announced the new company will receive substantial investment from five technology, content and communications heavyweights. Intel, Google, Comcast, Time Warner and Bright House Networks have agreed to invest a combined $3.2 billion in the new Clearwire. When all is said and done Sprint will hold a controlling share of the company with 51% ownership while Clearwire and the five strategic investors will own roughly 27% and 22% respectively. Clearwire CEO Benjamin G. Wolff said in reference to the five investors, "The combination of robust next-generation mobile WiMAX technology and nationwide spectrum that we believe is optimal for delivering mobile broadband services - coupled with substantial new financial resources, a team of experienced wireless industry veterans, and distribution and technology agreements with some of our nation's leading communications, technology and content companies - creates what I believe to be a once-in-a-lifetime opportunity."

Some of the new commercial relationships created by the merger include:

Intel will work with manufacturers to embed WiMAX chips into Intel(R) Centrino(R) 2 processor technology-based laptops and other Intel-based mobile Internet devices, and will market the new company's service in association with Intel's performance notebook PC brand.
Google will partner with the new Clearwire on an open Internet business protocol for mobile broadband devices. The new Clearwire will support Google's Android operating system software in its future voice and data devices that it provides to its retail customers.
Google will partner with the new Clearwire in the development of Internet services, advertising services and applications for mobile WiMAX devices. In addition, Google will be the search provider and a preferred provider of other applications for the new Clearwire's retail product.
Google and Intel have options to enter into 3G and 4G wholesale agreements with Clearwire and Sprint respectively and have no current plans to do so.
Sprint and Google have also entered into an agreement related to Sprint's mobile services, whereby Google will become the default provider of web and local search services, both of which will be enabled with location information, for Sprint. Sprint will also preload several Google services - including Google Maps for mobile, Gmail and YouTube - on select mobile phones and provide easier access to other Google services.
Sprint, Comcast, Time Warner Cable, and Bright House Networks will enter into wholesale agreements with the new Clearwire, becoming 4G providers of new Clearwire's mobile WiMAX service.
Comcast, Time Warner Cable, and Bright House Networks and, after completion of the transactions, the new Clearwire, will enter into 3G wholesale agreements with Sprint, becoming bundled providers of Sprint's wireless voice and data services, expanding the reach of Sprint's network to more customers, while providing the cable companies a simpler, more effective vehicle to bundle wireless services.

The new Clearwire is targeting a network deployment by the end of 2010 that will cover 120 to 140 million people in the U.S.

[via Sprint]

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