Update: Clearwire, Sprint close WiMax deal

IDG News Service - Sprint Nextel Corp. and wireless WAN operator Clearwire Corp. have completed a deal to create a new company and build a nationwide WiMax network with help from Intel, Google and three cable operators.

The deal, announced in May, brings together Sprint's and Clearwire's radio spectrum holdings and fledgling WiMax operations under a new company that will retain the Clearwire name. The new company also said it has received a previously announced investment of $3.2 billion from Intel, Google, Comcast, Time Warner Cable and Bright House Networks.

Clearwire plans to offer a mobile WiMax service, called Clear, with average downstream speeds of 2Mbit/sec. to 4Mbit/sec. The merged spectrum holdings give the new Clearwire 100 MHz or more of spectrum in most markets across the U.S., according to the company. Sprint's WiMax service in the Baltimore area, under the Xohm brand name, will gradually transition to the Clear name. As Clearwire converts its pre-WiMax mobile broadband services in several markets to standard WiMax, those will take on the Clear name as well, the company said.

The new venture aims to offer an alternative to traditional mobile services from carriers as well as wired broadband. It promises to make its client devices available through retailers, with no carrier subsidy and no term contracts for subscribers, as well as unfettered standard Internet access.

WiMax offers higher speeds than typical 3G (third-generation) mobile networks and is the only so-called 4G technology commercially available until LTE (Long-Term Evolution) goes on sale, probably in 2010 or later. But the ailing Sprint only began its long-delayed commercial Xohm service in late September and currently offers it only in Baltimore.

"This transaction gives Clearwire the opportunity to reinvent wireless," Clearwire CEO Benjamin Wolff said in a webcast Monday morning. "We fully understand that we are the underdog."

Clearwire hopes to offer a better experience for less money than cellular carriers, thanks to industry-standard equipment and a network based fully on Internet Protocol. The service launched by Sprint in late September starts at $35 per month for stationary use and $45 per month for mobile use.

Both transactions closed without any material changes in terms, despite the upheaval in the financial markets since May, Wolff said. An additional, previously announced investment, from Trilogy Equity Partners, is coming in the next few months, according to Clearwire.

Wolff will continue as CEO alongside Perry Satterlee, who will remain chief operating officer. Barry West, who ran Sprint's Xohm operation, is now president and chief architect at Clearwire, and Atish Gude, another former Xohm executive, is now senior vice president and chief marketing officer. Clearwire's board includes executives from Intel and Trilogy. But the company is independent from its corporate shareholders and can make its own decisions regarding where and when to build networks, Wolff said.