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Sprint teams with Clearwire on WiMax

By Kara Rowland
May 8, 2008

Sprint Nextel Corp. says its decision to merge its WiMax high-speed Internet unit with Clearwire Corp. will herald a new era in the wireless business — one in which consumers build their lifestyles around the mobile Internet.

So what is WiMax?

"WiFi on steroids," said Julie Ask, vice president and research director at Jupiter Research.

WiMax works similarly to WiFi service but it's faster and, with more bandwidth, can accommodate more users. It can also travel farther: A WiFi hot spot is generally in the range of about 100 feet; WiMax can stretch up to 30 miles, blanketing an entire city.

Indeed, that's what Sprint and its partners intend to do across the country. By 2010, they expect WiMax service to be available to as many as 140 million people across the U.S.

Under the deal announced yesterday, Sprint is combining its Xohm subsidiary with Clearwire to form a new public company that will be called Clearwire but controlled with a 51 percent interest by Sprint. Intel Corp., Comcast Corp., Time Warner Cable Inc., Google Inc. and Bright House Networks have agreed to invest a total of $3.2 billion in the venture.

Analysts say the deal is a way for subscriber-losing Sprint to get the cash to move forward with its WiMax strategy while freeing up the Overland Park, Kan., company to focus on customer-service problems and other issues plaguing its wireless voice business.

Clearwire is a Kirkland, Wash., wireless broadband provider with about 400,000 U.S. customers. Its network, which uses pre-WiMax technology, would get needed funds to expand.

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