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A sales rep at H Power Computing computer store in Honolulu holds out a Clearwire
wireless network system card (AP).
wireless network system card (AP).
Clearwire Merger May Change the World of Wireless
by
findingDulcinea Staff
by Josh Katz
A diverse consortium of technology giants announced Wednesday the formation of the new Clearwire company, which plans to take wireless to the next level.
A diverse consortium of technology giants announced Wednesday the formation of the new Clearwire company, which plans to take wireless to the next level.
30-Second Summary
Sprint Nextel and the former Clearwire spearheaded the deal, creating a new company with Clearwire’s Benjamin G. Wolff as chief executive and Sprint Chief Technology Officer Barry West as president.
The $14.5 billion partnership also involves Google, Intel, Comcast, and Time Warner as investors, who together are contributing $3.2 billion to the venture.
The motivation for the merger is as diverse as the parnters themselves. Sprint Nextel, the largest investor, is looking to gain ground on Verizon and AT&T. Comcast and Time Warner see the deal as an opportunity to extend broadband service beyond the home.
Intel already has a large stake in WiMax, which Seeking Alpha describes as “a technology that provides high-speed wireless data over long distances via mobile devices such as phones and laptops.” And, according to The New York Times, Google “hopes to develop another platform for advertising.”
Clearwire will look to harness WiMax technology to provide high-speed wireless services to a larger part of the nation than WiFi.
The alternative to Clearwire’s WiMax, called Xohm, is LTE, or Long-Term Evolution. AT&T and Verizon are going to adopt the LTE platform—which has been favored throughout the world—to compete with Xohm.
Clearwire’s consortium has the advantage of being first, but it suffers a number of potential drawbacks. Marguerite Reardon at CNet questions the ability of so many formidable companies to work together, writing, “Four of the main partners will essentially be selling services using the same network to some of the same customers.”
But Kevin Maney of Condé Nast Portfolio writes that it shouldn’t matter to the general public whether Clearwire and WiMax succeed, because they will likely benefit from the competition either way. “All in all, let’s hope a Sprint Nextel venture fires the starting gun, and we get an all-wireless, all-the-time world sooner rather than later.”
View Reuters coverage
The $14.5 billion partnership also involves Google, Intel, Comcast, and Time Warner as investors, who together are contributing $3.2 billion to the venture.
The motivation for the merger is as diverse as the parnters themselves. Sprint Nextel, the largest investor, is looking to gain ground on Verizon and AT&T. Comcast and Time Warner see the deal as an opportunity to extend broadband service beyond the home.
Intel already has a large stake in WiMax, which Seeking Alpha describes as “a technology that provides high-speed wireless data over long distances via mobile devices such as phones and laptops.” And, according to The New York Times, Google “hopes to develop another platform for advertising.”
Clearwire will look to harness WiMax technology to provide high-speed wireless services to a larger part of the nation than WiFi.
The alternative to Clearwire’s WiMax, called Xohm, is LTE, or Long-Term Evolution. AT&T and Verizon are going to adopt the LTE platform—which has been favored throughout the world—to compete with Xohm.
Clearwire’s consortium has the advantage of being first, but it suffers a number of potential drawbacks. Marguerite Reardon at CNet questions the ability of so many formidable companies to work together, writing, “Four of the main partners will essentially be selling services using the same network to some of the same customers.”
But Kevin Maney of Condé Nast Portfolio writes that it shouldn’t matter to the general public whether Clearwire and WiMax succeed, because they will likely benefit from the competition either way. “All in all, let’s hope a Sprint Nextel venture fires the starting gun, and we get an all-wireless, all-the-time world sooner rather than later.”
View Reuters coverage
Headline Link: ‘Technology Group Plans Wireless Network’
The New York Times writes, “The partnership of such fundamentally different companies underscores the convergence of Internet, entertainment and telecommunications services.”
Source: The New York Times
Opinion & Analysis: Debating the implications of Clearwire
‘Sprint Deal: Lurching Toward an All-Wireless, Always-Connected Future’
Kevin Maney writes in a blog for Condé Nast Portfolio that the world now yearns for wireless service all the time, and the participants in the Sprint deal understand that. Maney is not sure if Clearwire or WiMax will be successful, but if anything, the merger should “should set off a competitive race” to give the people what they want.
Source: Condé Nast Portfolio
‘Clearwire Merger: IPO Buyers Lose, Insiders Win’
BusinessWeek explains that the merger may not be as good as it sounds for those who bought Clearwire at its IPO price of $25 last March. Because the deal is so “convoluted,” shareholders get “one share in new stock for each share of old stock,” and they are not guaranteed to profit from the merger. Insider companies that helped fund Clearwire before it went public, however, are assured to profit.
Source: BusinessWeek
‘Is the New Sprint/Clearwire Venture Doomed to Failure?’
In her Cnet blog, Marguerite Reardon says she is pessimistic about the future of Clearwire. She thinks there are too many big players working on the project, and Sprint’s previous joint venture with cable companies failed. Reardon also sees potential problems with the WiMax technology that Clearwire is utilizing.
Source: CNET
Clearwire’s structure
An entry in DSLreports.com writes, “The one surprise from the Journal's report to me is that Sprint will cede control of the WiMax network to Clearwire CEO Ben Wolff, who'll be CEO at the new company. The new company will also retain the Clearwire brand, an interesting choice given Clearwire reviews around these parts (at least for the fixed WiMax variant) are consistently mediocre.”
Source: DSLreports.com
‘Intel's Expensive WiMax Habit’
Alexei Oreskovic claims Intel did not have much of a choice but to heavily invest in WiMax. “The problem is that Intel has based a good portion of its product development and business strategy on WiMax … Meanwhile, competing wireless technology, like LTE … were threatening to make WiMax obsolete if it didn't become available soon.”
Source: The Street
‘Sprint Forms WiMax JV With Clearwire’
Seeking Alpha writes that by merging with Clearwire, Sprint was trying “to disconnect from its downtrodden Wireless business” and release “the first nationwide WiMax network.” The site goes on to explain that WiMax, “an acronym for Worldwide Interoperability for Microwave Access, is a technology that provides high-speed wireless data over long distances via mobile devices such as phones and laptops.”
Source: Seeking Alpha
Related Topic: The future of the DirecTV-Clearwire partnership
DirecTV partnered with Clearwire about a year ago, and analysts have said the recent Sprint deal calls that relationship into question. But DirecTV responded that the Sprint merger would not affect much. DirecTV CEO Chase Carey said, “Clearwire really hasn’t had any meaningful—I don’t mean this in any derogatory way, they may have been focused on other things—but Clearwire has not been a meaningful part of anything we’ve been doing.”
Source: Multichannel News
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