It’s Official: Sprint, Cable & Google Building WiMAX Network

It’s official. Sprint and Clearwire announced this morning they will form a nation-wide WiMAX network, with partners Comcast, Time Warner Cable, Intel, Google and cable operator Bright House Networks who are expected to kick in $3.2 billion to help finance the venture.

The deal (pdf), announced on Wednesday, 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. Sprint spends some 30% of its $20 billion annual wireless operating costs on backhaul.

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.
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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.
Google will embed its Android operating system for mobile phones. Google will also be the search provider for the company’s WiMax services.

Intel will work with manufacturers to embed WiMax chips into its Centrino 2 processor for laptops and mobile Internet devices and will market the new company’s service in association with its own brand.

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 $3.2 billion from the others involved.
The investments by other participants include $1.05 billion from Comcast, $1 billion from Intel, $550 million from Time Warner Cable, $100 million from Bright House, a cable provider, and $500 million from Google. Trilogy Equity Partners, intends to invest $10 million, according to a person briefed on the arrangement.

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.

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