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Sprint and Clearwire have confirmed yesterday’s reports that they’re teaming up to create a new wireless broadband company. The new company, which will also be called Clearwire, should be the first to create a national mobile network using Intel’s WiMax technology, delivering broadband Internet at a much higher speed than existing 3G networks.
Intel, Google, Comcast, Time Warner and cable company Bright House Networks will invest $3.2 billion in this new company, while wireless veteran John Stanton’s Trilogy Equity Partners will invest directly in the new Clearwire’s common stock, which has a target price of $20 per share. Sprint will own 51 percent of the new Clearwire, existing Clearwire shareholders will own 27 percent and the strategic investors will collectively own 22 percent.
As we wrote yesterday, this looks to be a big win for all companies involved — particularly Sprint, which has been struggling, and WiMax, which is competing with rival technology LTE. (Others, however, argue that the situation risks becoming a “too many cooks in the kitchen” fiasco.)
The new Clearwire plans to cover between 120 and 140 million customers in its network by 2010.
The announcement includes a bunch of related partnerships between Sprint, Clearwire and the strategic investors. Google, for example, will work with Clearwire to develop Internet services, and Google applications like Google Maps and Gmail will now come preloaded on Sprint devices. Comcast, Time Warner and Bright House have made wholesale agreements with Sprint and Clearwire, and the two companies have also struck wholesale deals with each other.
Google Product Manager Larry Alder says his company invested $500 million, and he touts the deal’s potential for more open network policies, such as an open Internet protocol for mobile broadband devices.
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