In a complex deal that will certainly be critiqued for months to come, Sprint and Clearwire announced plans to combine their WiMAX businesses and create a new company that willÂ Â include a $3.2 billion investment from Intel, Google, Comcast, Time Warner Cable, Bright House Networks and Trilogy Equity Partners.Â (See a breakdown of the deal below.)
For sure, it's a shot in the arm for the mobile WiMAX industry, which, right or wrong, is tied to the success of Sprint's planned nationwide WiMAX rollout. I spoke with Atish Gude, senior vice president of mobile broadband operations with Xohm about the implications of the deal:
"This is a big day for for WiMAX, and it lends a lot of credibility for us to build our business model. We have always talked about the business model first. We are talking about broadening the chipset system, getting WiMAX into consumer electronics, eliminating subsidies and instituting at-home provisioning so customers don't have to stand in line. Those are all part in parcel to really change the mobile broadband experience in a way it ought to be."
About Intel's involvement... "Intel has done a great job on the Centrino platform, and they will extend credibility to the new brand."
Regarding the cable partners' involvement... "To have access to Sprint's and the cable companies' distribution channels is tremendous because it's hard to develop distribution. [The new business] will have a retail arm for consumers on its own but will also leverage the channels of our partners. The partners will have wholesale rights so they can bundle those products with their existing products ... There are a lot of benefits to the cable companies. They get access to 3G and 4G, while the new Clearwire will get a good cash infusion that takes the variability and uncertainty out of the business."
About Google's investment... "Google can extend its suite of applications to mobility. Customers will search on a great search engine and connect with a location-based engine that makes it even more powerful for our different service providers."
Will the Xohm brand go away?... "The new name of the company is called Clearwire, but Xohm is powerful and the new management will be given the opportunity regarding how to position the Xohm name in the market." In other words, no decision has been made to eliminate the name.
Stay tuned to more implications of the deal on Monday.--Lynnette