After months of rumors and speculation, the deal that the mobile WiMAX industry has been hoping for finally became a reality. This morning Sprint and Clearwire announced that they will be combining their WiMAX businesses and creating a new company that will include a $3.2 billion investment from Intel, Google, Comcast, Time Warner Cable, Bright House Networks and Trilogy Equity Partners. The deal is complex, so here's a breakdown of the key elements:
The "new" Clearwire: The new company will be named Clearwire. It will include Sprint's Xohm unit. Sprint will contribute its 2.5 GHz spectrum to the new Clearwire in exchange for an ownership stake in the new company. Clearwire CEO Ben Wolff will be the CEO of the new Clearwire. Barry West, Sprint's CTO and Xohm business unit leader will be the president. The new company will include staff from both the existing Clearwire and Sprint Xohm business unit. Headquarters will be in Kirkland, Wash., with significant presence and R&D in Herndon, Va.
MVNO deals: Comcast, Time Warner, Bright House and Clearwire will operate as MVNOs selling Sprint 3G services. But unlike the former Pivot JV, these players will sell the 3G wireless services using their own brand names. Once the 4G WiMAX network is built, Comcast, Time Warner, Bright House and Sprint will be MVNOs on the Clearwire network.
Sprint's role: Sprint won't be involved in the day-to-day operations of Clearwire but as the largest shareholder it will have input on the portfolio and the go-to-market strategy.
Intel: Intel will work with manufacturers to embed WiMAX chips into laptops and devices. It will also have the option to enter into a 3G or 4G wholesale agreement with Clearwire and Sprint if it wants too.
Google: Google will partner with Clearwire on an open Internet business model. Clearwire will support the Android operating system. In addition, Google will be the default provider of Web and local search on Sprint's network and Sprint will preload several Google services including Google Maps for mobile, Gmail and YouTube. Like Intel, Google will have the option to have a 3G or 4G wholesale agreement with Clearwire or Sprint if it wants too.
For more details
- see this press release.
Click here to see a timeline of the Sprint/Clearwire WiMAX deal.
Click here to see a chart depicting Clearwire's new spectrum position.