Sprint Nextel is partnering with Clearwire, a broadband technology company, to build a nationwide WiMax network for cell phones, both companies announced Thursday.
WiMax is a wireless technology that offers high rates of data transfer and a long transmission reach.
The Sprint Nextel and Clearwire mobile WiMax network is set to have speeds comparable to wireline broadband, the type of Internet connectivity commonly accessed by cable lines. Users will be able to use the network for wireless activities such as downloading media files for full-length movies and conducting video conferences.
Pending government approval, the deal is expected to be finalized within 60 days.
The two companies predict that together, by the end of 2008, they will offer mobile WiMax network access to about 100 million people. Eventually, Sprint Nextel plans to offer WiMax coverage to 185 million users in its 50 largest market areas in the United States, while Clearwire plans to give coverage to an additional 115 million people.
The deal will result in a faster deployment of the next-generation technology than either company could have achieved individually. The companies also plan to share in the commercialization and joint marketing of the network under one common brand, according to the joint statement.
Sharing the responsibilities of building such a costly type of network will also "enable each company to increase capital efficiency, and reduce overall network development and operating costs," according to the statement.
The deal makes technological sense, as Clearwire has expertise in fixed wireless broadband, and Sprint Nextel specializes in mobile wireless, two areas involved in the building of a comprehensive mobile WiMax network.
The network, if successful, could also help bolster revenue for Sprint Nextel, which has reported a string of weak financial quarters, prompting analysts to say it is struggling with its traditional business model.
Clearwire, which was founded by mobile-technology mogul Craig McCaw and had an initial public offering in March, is a small company that has already been partnering with some big players. The company announced a partnership with DirecTV and EchoStar Communications on wireless broadband services in June.
"Our joint efforts will result in customers benefiting from a more extensive network, operating sooner and using our respective spectrum more efficiently than either company could have on its own," Ben Wolff, Clearwire's chief executive, said in a statement.
Sprint is not the first mobile giant to partner with a technology company on WiMax technology. Motorola and Intel announced that they were making plans to build a mobile WiMax network in 2005.