Sprint, Clearwire Join Cable, Tech Companies For WiMax JV

If this deal actually happens it will be the biggest boost for WiMax yet. There are so many M&A rumors being floated about Sprint right now it's hard to know what to believe. But the WSJ seemed pretty confident today, that this deal will hit the wires if not tomorrow (Wed), then within a few days. Don't know why they would recycle this news otherwise, and they've added details as to participants, ownership, mgmt, and levels of investment.

If this is true it should put some pressure on AT&T and Verizon, as it puts a strong competitive wireless system in motion nationwide, at least 2 years before they're ready to start investing in LTE.

steve

Dan,

I'm of the opinion that the reception of WAN Internet will be something akin to the uptake of cell phones in the late 90s/early 00s. Namely, people gradually started migrating from landlines to cell phones and now a large portion of the populace doesn't even have a landline (myself included).

Wireless Internet is in more-or-less the same boat. As soon as the US is exposed to a technology that is on par with home broadband, people are going to cut wires as quickly as possible. Simple routers will emerge that support WiMAX (and LTE) and you'll just be able to pop your card out and put it in your laptop when you roll out.

It's just a matter of time now. I'm glad to see Sprint get so much support. I was worried for awhile that it was going to fall short on WiMAX making LTE the closest thing on the timeline (and LTE isn't really a true 4G tech).

Nevertheless, Verizon is still going to be swinging competitively in the near future. It's rolling out FiOS as quickly as possible, it'll begin LTE deployment soon and it just won the largest block of the new spectrum. It's going to be hard to compete with that even with a few billion dollars of life.

This is yet another empty PR that will not lead to anything important or meaningful for the industry players involved (with the exception of CLWR) and - more importantly - for the country, which desperately needs a competitive force to challenge the cable-telco duopoly in broadband and the ATT-VZ duopoly in mobile.

This deal is a way for Sprint to get rid of a problem. It has to do something with the 2.5GHz spectrum per the conditions of the merger with Nextel. The last thing sprint needs is to get into yet more trouble with the FCC (it is already in deep shit because of the delay in moving away from the 800MHz band and paying the costs that public safety will incur as it also moves around some of its radios). So, Dan Hesse needs some breathing space to solve major problems he faces (operations/customer service, customer acquisition, M&A discussions with DT), and this gets rid of this problem, at least for the time being.

Intel is probably throwing yet more money into this to continue its PR initiative in a de facto lost war: it will not be able to compete make any money in the next generation of mobile technology, which will be by and large LTE, because it really does not have any relevant IP to exchange with others that have (e.g., Ericsson, NOK). And it is unclear even if WiMax IP is in any way shape or form immune from a challenge of Qualcomm (remember the Flarion acquisition? here it rears its head). But Sean Maloney needs to save his face (after all, he is probably the next CEO) and hence they needed to save its 2nd tier US deployment hope to continue to justify - internally and to the Street - spending billions of dollars in this stupid WiMax thing. Has anyone seen Intel articulate how it will make money out of this in any convincing detail? Only large, high margin monopolies can afford to blow away this amount of money and management effort/focus, billions and billions of dollars and thousands upon thousands of hours. Why can they do it? Because they are so big and profitable that these billions of shareholder value cannot be tracked. They are probably equivalent to a fluctuation of a few points of market share vs. AMD over time.

I bet you the cable guys are not putting any money into this. That is why they are doing it. No financial downside - a free option. I also bet you they have no hard adds commitment. And I bet that 24 or 36 months from now this will make no difference whatsoever in their results.

The only winners (at least in the short term) are McCaw (which is a genius when it comes to building businesses with other people's money!) and his shareholders because CLWR gets valued on an improved basis by those who let hype pollute their views. They also get access to spectrum or roaming rights on a national basis, probably important to a part of the niche market they will continue to serve.

But this will not - unfortunately - be a challenge either to the boradband duopoly or to the wireless duopoly. Too bad for the country, for the consumers and for the tech industry.

And do not hold your breadth for VZ's open 700MHz network. GOOG's reg lawyers have a better chance at the Roman Coliseum than taking on the VZ reg lawyers on this!

From the Comcast perspective, yes, this deal gives us the flexibility to build our own products and wireless brands. And I think that there will be lots of opportunities for killer apps. We think this is a very interesting group of companies that are innovative and will bring lots of innovation and creativity to developing next generation products. This is very appealing. It's too early to talk about specific products but this gives us the opportunity to bring wireless connectivity to a range of devices.