Clearwire and Sprint Nextel announced today that the two companies will collaborate to create a new telecommunications company with assets starting at $14.55 billion. The venture is to be called Clearwire and will receive a $3.2 billion investment from Intel, Google, Comcast, Time Warner and Bright House Networks.
Sprint Nextel will control 51% of shares in the new company. Existing Clearwire shareholders will control 27% of shares. Contributors to the $3.2 billion investment will receive the remaining shares.
“The agreement enables us to get to market faster and reach a broader audience than we could have if we went alone,” Dan Hesse, Sprint Nextel’s chief executive officer, told analysts during a conference call Wednesday.
Clearwire will focus on building a mobile network based on WiMax technology. WiMax has faster download speeds and better indoors coverage than most current service provider’s technology. Some also see WiMax as a competitor to fixed-line broadband.
Clearwire currently uses WiMax to provide wireless Internet service in some parts of the United States. In 2007, Clearwire had a subscriber base of nearly 400,000 broadband customers. The restructured company has the goal to develop a network that has the potential to reach 120 million to 140 million people by the end of 2010.
Service providers like AT&T and Verizon Wireless aren’t planning to use WiMax technology, Instead, there are upgrading current networks and working on future technology called Long Term Evolution.
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