Update – May 7, 2008: It’s official. Sprint and Clearwire announced the formation of the “new” Clearwire, as discussed below in the original May 6th post.
A mega deal which involves Sprint, Clearwire, Intel, Google, Comcast, Time Warner Cable, and Brighthouse Networks is on the verge of being announced according to the Wall Street Journal (subs. req.). The deal will merge Sprint and Clearwire’s WiMAX assets into a company valued at $12 billion. The company will retain the Clearwire brand and will be led by Clearwire’s CEO Ben Wolff. The cable company investments totaled over $1.5 billion, led by Comcast who ponied up over $1 billion. The deal has been rumored for months. It is expected to be announced as early as Wednesday.
It appears as if WiMAX will now have the foothold it needs to become a 4G wireless force in the North American market. Cable companies including Comcast, Time Warner Cable, and Brighthouse will now have access to a legitimate broadband wireless network and begin the long process of integrating wireless opportunities into their core business. The deal will allow cable companies to sell broadband wireless under their own brand. It’s somewhat surprising that cable companies and Sprint are partnering for another wireless venture, given the failure of their previous joint effort, Pivot Wireless. Perhaps Pivot’s demise was intentional to make way for Clearwire. It’s not clear what this development means for cable’s AWS spectrum holdings. Regardless, this new WiMAX momentum will provide interesting competitive observations. Sprint will conceivably gain a considerable 4G lead over their main competitors, AT&T, T-Mobile, and Verizon, who have all tagged LTE as their 4G technology of choice. It will be at least a couple years before we see them bring something to market though. It’s some welcomed news for Sprint, which has seen nothing but rumors focused on their troubles swirling for the past few weeks.