Sprint, Clearwire form $14.5B WiMAX venture

After months of speculation, Sprint and Clearwire Wednesday announced that they are combining their WiMAX businesses to create a new US$14.5 billion mobile broadband company.

As expected, the new company will be focused primarily on deploying a nationwide WiMAX network that will provide 4G coverage in both rural and urban markets. The new company, which will be known as Clearwire, will also concentrate on delivering wireless broadband to consumers, businesses and even government public safety services, Sprint says.

In addition to forming their new joint WiMAX venture, the two companies also announced that they had secured $3.2 billion in total investments from several major tech and communications companies, including Google, Intel, Comcast, Time-Warner Cable and Bright House Networks. Under the strategic investment agreement signed by the companies, Sprint will own the largest stake in the new company at 51%, Clearwire will own about 27% of the company, and the group of five major investors will own 22%.

Sprint and Clearwire had previously signed a letter of intent to jointly build out a nationwide WiMAX network last summer, but then called off their plans months later, as the companies said they "could not resolve complexities" involved in the original plan. Former interim CEO Paul Saleh told an investor's conference last year that the original plans with Clearwire fell apart because having a WiMAX network split between the two companies had simply become too complicated, and the companies were worried that it might confuse customers.

Since then, both Sprint and Clearwire have been rumored to be negotiating a new deal to build out a nationwide WiMAX network with help from outside investors. Intel and Clearwire have a history of working together on WiMAX-related projects, and Intel announced earlier this year that it would integrate WiMAX into its new Montevina mobile platform.