Sprint, cable form $14.5 billion Clearwire venture
By Sinead Carew
NEW YORK (Reuters) - Sprint Nextel Corp and top U.S. cable companies are investing in Clearwire Corp to introduce high-speed wireless Web services and get a head start on AT&T and Verizon, but analysts said the seven-way partnership may be too complex to succeed.
The new Clearwire, a $14.5 billion venture with Sprint, Comcast Corp, Time Warner Cable Inc, Intel Corp, Google Inc and Bright House Networks, will build a network based on the emerging WiMax technology.
WiMax promises to blanket entire cities with Web access for laptops, cell phones and other consumer devices at fast speeds. Clearwire aims to offer WiMax in a service area covering as many as 140 million people by the end of 2010.
Sprint, which would otherwise have had to invest $5 billion on a solo WiMax network, will inject its WiMax assets valued at $7.4 billion into the venture, giving it 51 percent ownership.
Cable operators Comcast, Time Warner Cable and Bright House and chip maker Intel and Web search leader Google get a total of 22 percent of the venture for their combined $3.2 billion.
Existing shareholders of Clearwire, founded by wireless pioneer Craig McCaw, will own the remaining 27 percent of the venture, which is expected to retain Clearwire's stock symbol.
The venture gives Sprint, the No. 3 U.S. mobile service, formidable allies in its battle against larger rivals AT&T Inc and Verizon Wireless. But analysts pointed to Pivot, a venture between Sprint and cable companies that collapsed in April after two-and-a-half years, because it had too many conflicting interests.
"They've let an awful lot of foxes into the hen house that may or may not be in this to make money on the wireless data business," said Bernstein analyst Craig Moffett. Continued...
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