Sprint completes Clearwire WiMAX deal

Clearwire has secured $3.2 billion in investments to build WiMAX network

Sprint officially spun off its WiMAX division to Clearwire today, thus paving the way for Clearwire to construct a nationwide WiMAX network.

Sprint Nextel  officially spun off its WiMAX  division to Clearwire today, thus paving the way for the newly merged company to construct a nationwide WiMAX network. (View a slide show of 2008's hottest M&A deals.)

Sprint's WiMAX transaction, which was first announced last May, cleared its final major hurdle last month when the Federal Communications Commission concluded that allowing Sprint's WiMAX division to merge with Clearwire would not harm the wireless competitive landscape in the United States. With the transaction complete, Clearwire says that it will concentrate on building out WiMAX services that will extend across the country.

In addition to merging with Sprint's WiMAX network -- which launched commercially in Baltimore earlier this year and which is expected to launch commercially in Washington, D.C., and Chicago by year-end -- the new Clearwire  will benefit from $3.2 billion in investments it has received from technology and cable companies including Comcast, Intel, Time Warner Cable, Google and Brighthouse Networks. The vast majority of the $3.2 billion will be spent on building out network capability, Clearwire CEO Ben Wolff said during a conference call today. He touted WiMAX's potential to deliver wireless data at broadband speeds, and said that Clearwire was in the perfect position to build out the first nationwide 4G network in the United States now that it has acquired Sprint's entire 2.5GHz spectrum holdings.

Wolff also sought to downplay WiMAX's competition with Long Term Evolution (LTE), a 4G wireless data standard that is the natural progression of High-Speed Packet Access (HSPA), the GSM technology that today is used by such carriers as AT&T to deliver 3G mobile broadband. Rather than seeing WiMAX and LTE as competing standards for mobile broadband customers, Wolff said the two technologies should be viewed as complementary.

"We know that consumers don't care about what type of technology we use," Wolff said. "We are taking steps to ensure that our network is 'future-proof.' WiMAX and LTE have a lot in common, and there are vendors that will be able to deliver mobile infrastructure to us that will allow us to deliver both LTE and WiMAX should we choose to do so in future . . . this is nothing like the format battle between VHS and Betamax or between HDTV and Blu-ray."

The new mobile WiMAX services would be branded simply "Clear," and would replace the brand name for Sprint's Xohm WiMAX business division, Clearwire said

Copyright © 2008 IDG Communications, Inc.

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