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Sprint, Clearwire team up on WiMax deal
Grant Gross
July 19, 2007 (IDG News Service) Sprint Nextel Corp. and Clearwire Corp. have entered an agreement to jointly build the first nationwide WiMax network in the U.S., the two companies announced today.
The vendors will work together on the WiMax network and expect to offer service to a broad range of users, including the U.S. government, public safety agencies, businesses and consumers, they said.
The two companies plan to reach 100 million U.S customers by the end of 2008, said Gary Forsee, Sprint Nextel's chairman and CEO, during a press conference. The WiMax network, which will be marketed under a common brand, will compete with and complement existing broadband services, he said.
The deal "will fundamentally change the communications landscape in this country," added Ben Wolff, Clearwire's CEO. "By working together, a nationwide network becomes possible."
Sprint Nextel will build about 65% of the network, and Clearwire will build the remaining 35%, the companies said. The agreement still needs to be finalized, and it will be subject to regulatory approval by the U.S. Department of Justice and spectrum transfers from the U.S. Federal Communications Commission.
Sprint Nextel will focus on geographic areas covering approximately 185 million people, including 75% of the people located in the 50 largest U.S. markets, while Clearwire will concentrate on areas covering approximately 115 million people.
A year ago, Sprint Nextel announced its plans for a nationwide WiMax network. The partnership with Clearwire allows Sprint Nextel to invest less money to create a nationwide network, Forsee said. The agreement will also allow the two companies to provide customers with "more breadth and depth of support," he added.
The partners said the wireless network will provide broadband-speed Internet access to customers. The agreement will enable "seamless" roaming across the network, Forsee said. WiMax is designed to operate more than five times faster than current third-generation wireless networks.
The arrangement will allow the exchange of spectrum between Sprint Nextel and Clearwire to enable each company to build its portion of the network and to enhance service in its buildout territory, the companies said. Clearwire will be able to use some of Sprint Nextel's wireless infrastructure.
The initial term of the arrangement is 20 years, with three 10-year renewal periods.
Latest Rumor July 17, 2007:
as much as there is speculation, it is possible that Cisco may be looking for an acquisition in the 700 Mhz range.
Cisco states the value of WIMAX equipment at about $6B for 2007/2008 but also claims that ecosystem equipment sales (VoIP, backhaul infrastructure, etc) potential is equal if not greater than that $6B figure.
They are working with Sprint to incorporate WIMAX in Linksys products for the subscriber end and they already already have the solutions for the transmission, aggregation, Multi-service core, and service core (VoIP, mobile TV, etc). The only missing component in their WIMAX portfolio is the Base Station technology.
"We don't see the volumes in the market," Mikael Persson, manager of strategy for
Ericsson's advanced wireless technology, told Unstrung. "I don't understand how this
market will survive."
Ericsson has a major investment in the competing WCDMA cellular technology, and WiMax threatens to cannibalize that business. But the mobile broadband road map it's backing, known as Long-Term Evolution, appears to be at least two years away from being ready.
Meantime, Sprint Nextel is promising that its WiMax network will deliver service well before the next-generation 3G cellular Ericsson is betting on.
Sprint is sticking to its plan for a "soft launch" of WiMax by the end of this year and commer-cial service in at least 19 markets by the middle of 2008, part of a $3 billion WiMax network build-out. Last week, the carrier named Boston, Denver, and Minneapolis as cities in the launch and said Samsung and ZTE will make WiMax PC cards.
On a WiMax panel at last week's CTIA Wireless conference, Barry West, president of Sprint Nextel 4G mobile broadband, said the company's network will be stable and available to 100 million potential customers by the end of next year, "and there won't be a sign of any of these other technologies."
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