WiMax goes mainstream: Sprint, Clearwire to build national network

WiMax goes mainstream: Sprint, Clearwire to build national network

Summary: Sprint and Clearwire are pooling resources in a venture that could take WiMax nationwide.The two companies said Thursday that they plan to build a national WiMax (4G) network.

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TOPICS: Networking, Telcos
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Sprint and Clearwire are pooling resources in a venture that could take WiMax nationwide.

The two companies said Thursday that they plan to build a national WiMax (4G) network. The partnership, which is a 20-year agreement with three 10-year renewal terms, will enable a "broader and more efficient deployment of a mobile WiMAX broadband network than either company could accomplish on its own." WiMax, or "worldwide interoperability for microwave access," is a standard that allows wireless signals to be sent over long distances from towers that can cover up to 3,000 square miles.

In a statement, the companies said:

The WiMAX network is being designed to deliver mobile broadband services in urban, suburban and rural markets, and enable significantly greater depth and breadth of services. The arrangement also is expected to enable each company to increase capital efficiency and reduce overall network development and operating costs.

What that means in a nutshell is that Clearwire and Sprint will proceed with their existing WiMax network buildouts, but enable roaming between territories. The companies will collaborate on product, services, infrastructure, marketing and distribution. The companies will also swap 2.5 GHz spectrum. Sprint will build out the bulk of the network with Clearwire building 35 percent of the network. Sprint Nextel CEO Gary Forsee said on a conference call that no cash is being exchanged in the deal. Sprint Nextel will take the lead on marketing the service.

Here's how the two companies will split the network:

Sprint Nextel will focus on areas with about 185 million people, including 75 percent of the people located in the 50 largest markets. Clearwire will focus on areas with about 115 million people. These folks will then be able to roam between the two networks. Clearwire will also be able to use the infrastructure of Sprint Nextel. The companies hope to pass 100 million people by the end of 2008.

This deal has a lot of potential to take WiMax mainstream. Here's a look at the winners: Sprint and Clearwire: Clearwire went public and investors were skeptical about the capital required to build out its network. Sprint also faced critics for spending billions on a WiMax network when it can't even service high maintenance customers.

Forsee said Sprint's capital expenditures will decline with the Clearwire deal, but didn't provide details. He added that more details will emerge as the company outlines its "WiMax business case" on Aug. 16.

Clearwire CEO Ben Wolff also noted that its capital expenditures will be lower as it uses Sprint Nextel's infrastructure. In addition, Clearwire service will be distributed in Sprint Nextel stores. Like Forsee, Wolff said it would provide updates on its business model as the deal is finalized.

Intel: The chip giant has been a big backer of WiMax and has plans to embed the technology into its chips just like it did for Wi-Fi. Now it has a network to make WiMax chips more of a must have. Intel plans to embed WiMax on its chips by the end of 2008. Clearwire shareholders: This arrangement really reads like a precursor to a Sprint Nextel acquisition to me. Even if a takeover doesn't happen Sprint just validated Clearwire as a contender. Indeed, Bear Stearns analyst Philip Cusick upgraded Clearwire to outperform from peer perform on the news. In premarket trading Clearwire shares (CLWR) were up 17 percent to $29.20. Clearwire went public March 8 at $25 a share. Executives noted there will be change of control provisions in the partnership.

Consumers: You get another wireless access network to use that'll be faster. With any luck that'll help pricing on all fronts. Cusick estimates that pricing for the WiMax network will have a ceiling of $60 a month given 3G competition.

Topics: Networking, Telcos

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11 comments
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  • Ah the Steamroller finally starts up

    Right on time too! I wonder how close this is to my original predictions . . .

    The MESHing algorithms that allow for "roaming" make WiMAX better than WiFi networks and their limited ranges (and no roaming capability).

    So all we need now is that handheld, VoIP phone and it's goodbye to cell! Hey Apple, we have an opportunity here! But wait, you're all tied up with AT&T . . .
    Roger Ramjet
    • Who's to say the wouldn't make a VoIP app for iPhone..

      Besides, our good friends at Cisco might through another fit about Apple and iPhone.
      Apple is only limited on building cellphones, not other communications devices, by
      AT&T. By definition, a WiMax phone isn't really a cellphone.

      Just my 2?.
      nix_hed
      • Not my point

        The point I was making is that Apple signed a multi-year agreement with AT&T - while Sprint is the WiMAX king. I'm not sure what no-compete agreements Apple is responsible for.
        Roger Ramjet
  • One thing I take from this, WiMAX

    will be the futute of wireless. These companies are looking way down the road when they sign a 50 year agreement.
    No_Ax_to_Grind
  • WiMax is not MicroWave; it is 700 MHZ in USA

    Lets not be confused. To economically deploy fully mobile networks WiMAX needs lower bands than microwave. Hence this article's reference to microwave is in error or at least out of date as WiMax is being implemented in the USA. 3GHz and above bands are not suitable for fully mobile networks as proper coverage would require too many base stations compared to sub 1GHz bands. The over 3Ghz bands are limited to stationary users or users moving at pedestrian speeds at best and are certainly not suitable for watching broadcasted films in the back seat of an automobile.

    We in the USA IT industry work towards influencing our government to utilize the 700 MHz band which is being freed up owing to the HiDef tv. The implications for our economy and democracy are huge. This 700 MHz band is already supported by infrastructure. Virtually every home and business across the nation already uses it. It is the spectrum used by wireless TV that is being freed up owing to the implementation of HiDef TV.

    That 700 MHz band was set aside to educate the masses so that better choices could be made by consumers and voters. Hence it is fundamental to our security and well being. We can not let it be taken from us by corporations who - to protect vested interests (like cable and 3Ghz devices) - are likely to delay this Web 2.0 enabler.

    Lets not let our government sell the greatest commons of all of history as is being planned. Let the people administer this spectrum as we always have. MiMax to the Max.

    Frank L. Mighetto
    US Citizen Patriot
    mighetto
    • The frequency allocation for WiMAX is a bit higher.

      EU commissioner Viviane Reding has suggested re-allocation of 500-800 Mhz spectrum for wireless communication, including WiMAX. In the US, the biggest segment available is around 2.5 GHz and is already assigned, primarily to Sprint Nextel and Clearwire.

      Web 2.0 is a marketing term and the frequency allocation has no bearing on it.

      Elsewhere in the world, the most likely bands used will be around 3.5 GHz, 2.3/2.5 GHz, or 5 GHz, with 2.3/2.5 GHz probably being most important in Asia. Some countries in Asia like India, Vietnam and Indonesia will use 3.3 GHz.
      B.O.F.H.
  • Little capital expenditures should be needed in USA

    We work to make things so clear now. Clear wire should not need to spend much on infrastructure. Sprint should not need to spend much on infrastructure. AT&T - which is heavily invested in Clear wire - should not need to spend much on infrastructure in the USA. Because....

    The infrastructure has already been provided through government support of the 700 Mhz spectrum. That spectrum becomes available owing to moving TV - which currently is broadcast there - to HiDef TV. The spectrum is already administered by the government. In combination with Web 2.0. It is the greatest public commons of all of history.

    Now lets be even more clear. The federal government by our constitution can not turn over to private interests those functions fundamental to operating the federal government. The most fundamental operation at the federal level is voting. The 700 Mhz spectrum was set aside with the intent of educating citizens so they could make better decisions as consumers and as voters.

    Anyone with a business plan that supports that set aside goal - regardless of ability to pay - should be able to use that spectrum.

    The USA will dominate the world economy owing to WiMax/Web 20 because no other nation has saved this 700 Mhz spectrum for support of its democracy and consumers as we have.
    mighetto
    • No ine really cares

      what freq. is alocated, long as it works.
      No_Ax_to_Grind
      • Why US Patriots Care the WiMax us 700mhz spetrum

        A broad industry consortium cares and US patriots care. Owing to Kerry, WiMax might be viewed as a Demo thing but it really crosses parties. Kerry is just vocal about it.

        The 700mhz spectrum allows WiMax to operate in fully mobile mode. The Ghz spectrums require stationary or close to that operation especially over 3 Ghz. Hence this 700mhz spectrum is really one of the best for broadband wireless. There is also 400mhz spectrum but I think that is used by the military. Outside of technical reasons...

        Patriots care because this is a taking. Property rights are fundamental to the US democracy and land and water rights are subjects of ongoing legal battles. The federal government can not just condemn your property take it and then sell it to the highest bidder. Like wise it can not sell national parks to corporate interests. It administers these properties which belong to all the citizens.

        We are saying that land and water are no different than air. The citizens have property rights. The property in question, air waives, in the spectrum previously dedicated for broadband TV, was set aside for a purpose. That purpose was to educate the population for better consumer decision making and for voting. Any business proposal that meets that purpose has and should continue to have access the the spectrum. Companies that are prepared to implement quickly should be allowed to. The 700 mhz spectrum is pure information super highway. It is there for all to use.

        The speed of the implementation of broadband wireless access for Web 2.0 is important. Vested interests in bounded media and cell phone spectrum will work against us. Corporations will buy 700 mhz spectrum and just sit on it - do nothing - in other words if the purchase allows them to control it.
        mighetto
        • And I tell you plainly, users will not care at all.

          Anymore than they care who made the sneakers with the Nike label.
          No_Ax_to_Grind
        • You appear to be the only one who cares out this issue.

          Your generalization (perhaps based upon your bias) does not exist in the general population (much less those that would be WiMAX consumers). The frequencies to be allocated are already known and published, you are referring to something several hundred MHz below what was purchased by Sprint, etc. The frequency allocation and spectrum issues have no bearing to ones patriotism, either. This is a allocate spectrum and business issue, not a patriotism (or ignorant bias) issue.
          B.O.F.H.