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NewsGlobe: Currents
Clearwire, with Sprint XOHM onboard, is a go
Shareholders approve merger and announce plans for a gradual national deployment
by Doug Allen
Clearwire cleared the last hurdle in its path to finalizing its merger with Sprint-Nextel XOHM this week, when Clearwire shareholders approved the acquisition. There’s still a few legal and financial wrangles to go through, as the final papers detailing the deal are drawn up, but most observers expect the deal to close by year’s end, or possibly, December 1.
Hailed as potentially the first major national WiMAX provider, Clearwire is an important addition to the telecom scene. The joint Clearwire/Sprint-Nextel XOHM initiative have combined to form a US$14.5 billion company which could become a powerhouse among mobile operators. An additional US$3.2 billion infusion of capital is expected from Intel Corp., Google Inc., Comcast, Time Warner Cable and Bright House Networks upon completion of the deal.
In terms of voting interest, Sprint will take a majority 51% equity ownership stake, while Clearwire shareholders take a 27% share, and the afore-mentioned strategic investors, 22%.
Clearwire has set ambitious goals, targeting a robust network buildout that can reach 120-140 million subscribers by end of 2010. Clearwire has spent considerable investment capital to build its proprietary NextNet broadband wireless network, aimed at the residential market, over the last two years.
Clearwire is going with WiMAX as its 4G technology, as opposed to LTE. That’s partly because WiMAX equipment and technology is available today. Sprint has already launched WiMAX service in Baltimore, MD and plans to roll out service in Chicago and Washington, D.C. by the end of the year (see Sprint turns up XOHM in Baltimore )Sprint and Clearwire have already either built out or begun construction on WiMAX facilties in Atlanta, Las Vegas, Portland, Oregon and Omni Rapids, Michigan. However, the new Clearwire may turn up service in some of these markets, particularly Chicago and Washington, D.C., before actively marketing the services for general availability.
Some of the largest telcos are pinning their future hopes, as well as network, marketing and financial resources on LTE: AT&T and Verizon Wireless are just beginning LTE trials with an eye to widespread deployments in 2011. But whether or not WiMAX can become an entrenched alternative, first-mover advantage notwithstanding, by the time LTE becomes a significant market factor, is still anyone’s guess.
These facts on the ground favor a relatively steady WiMAX rollout. Clearwire plans to offer mobile Web services over a variety of new devices based on integrated WiMAX chipsets and an open operating system architecture. WiMAX-enabled devices will include laptops, phones, PDAs, mobile Internet devices and consumer electronic equipment—anything that can deliver mobile broadband personal and/or business applications such as videoconferencing, video podcasts, games, and high-volume data files.
“Today, our shareholders have taken a transformative step toward enabling an entirely new mobile Internet experience for consumers and businesses across the country,” said Benjamin G. Wolff, Clearwire CEO, in a statement. “With an unmatched spectrum portfolio, a next generation all IP network, an ever-expanding ecosystem of mobile 4G devices, and the backing of some of the most innovative communications, entertainment and technology companies, in the world, Clearwire is ready to redefine mobile Internet services in the U.S.”
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