Sprint, Clearwire team up on WiMax deal

Deal subject to regulatory approvals

Sprint Nextel Corp. and Clearwire Corp. have entered an agreement to jointly build the first nationwide WiMax network in the U.S., the two companies announced today.

The vendors will work together on the WiMax network and expect to offer service to a broad range of users, including the U.S. government, public safety agencies, businesses and consumers, they said.

The two companies plan to reach 100 million U.S customers by the end of 2008, said Gary Forsee, Sprint Nextel's chairman and CEO, during a press conference. The WiMax network, which will be marketed under a common brand, will compete with and complement existing broadband services, he said.

The deal "will fundamentally change the communications landscape in this country," added Ben Wolff, Clearwire's CEO. "By working together, a nationwide network becomes possible."

Sprint Nextel will build about 65% of the network, and Clearwire will build the remaining 35%, the companies said. The agreement still needs to be finalized, and it will be subject to regulatory approval by the U.S. Department of Justice and spectrum transfers from the U.S. Federal Communications Commission.

Sprint Nextel will focus on geographic areas covering approximately 185 million people, including 75% of the people located in the 50 largest U.S. markets, while Clearwire will concentrate on areas covering approximately 115 million people.

A year ago, Sprint Nextel announced its plans for a nationwide WiMax network. The partnership with Clearwire allows Sprint Nextel to invest less money to create a nationwide network, Forsee said. The agreement will also allow the two companies to provide customers with "more breadth and depth of support," he added.

The partners said the wireless network will provide broadband-speed Internet access to customers. The agreement will enable "seamless" roaming across the network, Forsee said. WiMax is designed to operate more than five times faster than current third-generation wireless networks.

The arrangement will allow the exchange of spectrum between Sprint Nextel and Clearwire to enable each company to build its portion of the network and to enhance service in its buildout territory, the companies said. Clearwire will be able to use some of Sprint Nextel's wireless infrastructure.

The initial term of the arrangement is 20 years, with three 10-year renewal periods.

Copyright © 2007 IDG Communications, Inc.

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