Sprint Nextel, Clearwire combine forces to 4G wireless internet

02 December 2008

Clearwire Corp. and Sprint Nextel Corp. have completed a deal to combine their next-generation wireless Internet operations.

Sprint and Clearwire had said they would roll out Sprint's mobile WiMax Internet network, which is expected to reach as many as 140 million people, within 30 months of the deal's approval. Clearwire already has about 400,000 customers on a network that uses similar technology. The new company will absorb Sprint's existing Baltimore-area WiMax network, which the company developed under the XOHM brand, in addition to Sprint spectrum covering much of the country.

At the close of trading Friday, Sprint's shares added 11.6 per cent to $2.79 and Clearwire's were up 9.8 per cent at $6.62. Clearwire gained 1.4 per cent in post market trading.

Earlier this year Sprint sold its WiMax business to Clearwire as part of their 4G venture, valued at an estimated $14.5 billion, which would combine all the spectrum licenses owned by the two companies into a new firm, Clearwire, allowing Sprint to retain its cellular business and third-generation (3G) data network. The new venture includes an infusion of over $3 billion in cash from Google, Intel, and several cable operators.

Intel Corp., Google Inc., Comcast Corp., Time Warner Cable Inc. and Bright House Networks collectively invested $3.2 billion in the new company, which will retain the Clearwire name. Sprint will hold around 51 per cent of the firm, existing Clearwire shareholders will own 27 per cent and the new investors will hold 22 per cent.

Benjamin G Wolff will continue as Clearwire's chief executive officer, and Perry Satterlee continues as the company's chief operating officer. Sprint's two most senior WiMAX leaders have joined Clearwire's management team. Barry West, who served as Sprint's chief technology officer and XOHM business unit leader, is now president and chief architect of Clearwire, and Atish Gude, formerly senior vice president of Sprint's XOHM mobile broadband operations, is now senior vice president and chief marketing officer of Clearwire.