Update: Sprint, Clearwire in $14.5 billion WiMax joint venture

Computerworld - Sprint Nextel Corp. and Clearwire Corp. have struck a deal for an ambitious joint venture valued at $14.5 billion that would put Sprint's high-speed wireless WiMax unit, known as Xohm, under the Clearwire name.

The deal was announced today by Sprint CEO Dan Hesse and Clearwire CEO Dan Wolff in a morning conference call. Wolff will become CEO of the new entity, subject to shareholder approval by Clearwire investors and regulatory approvals, including the Federal Communications Commission. The deal could be closed by the fourth quarter this year.

The deal has been in the works for months, and one person familiar with the talks confirmed in a March interview with Computerworld that Sprint was trying to finalize it before the CTIA conference in early April. That deadline passed without further comment by any of the parties said to be involved, however.

Sprint had been desperately seeking investors for a massive multibillion-dollar buildout of the new WiMax technology, which has been under construction in the trial markets of Chicago and Washington.

"This has been a complex puzzle to solve," Hesse said this morning, but he described Sprint and Clearwire as a "natural fit" that will create a national footprint of fast WiMax connections and allow an acceleration of a WiMax buildout to be able to reach 120 million to 140 million people by the end of 2010.

Although neither executive gave many details about cost or wireless speed of the upcoming WiMax service, Wolff said it will be a "robust, rich and consistent Internet experience." He noted that Clearwire's current rollout in Portland, Ore., has achieved more than 6Mbit/sec. downlink speeds and more than 2Mbit/sec. uplink speeds. The service will reach consumers, small and large business users and even the public safety segment, they said.

A Sprint spokesman said conservative estimates of the downlink speeds will be 2Mbit/sec. to 4Mbit/sec. on average, with 10Mbit/sec. peak downlink speeds, with 1Mbit/sec. to 2Mbit/sec on average for uplink, depending on the processing power of the user's device.