Comcast Cable CEO Neil Smit said that the cable giant's decision to sell its wireless spectrum to Verizon Wireless won't have an impact on its investment in WiMax pioneer Clearwire.
Comcast, Time Warner Cable and Bright House Networks agreed to sell their wireless spectrum assets -- held in an entity called SpectrumCo -- to Verizon for $3.6 billion. In addition, the deal includes cross marketing opportunities between the parties, with the cable companies receiving the right to offer their own branded wireless services over the Verizon Wireless network beginning in 2015.
At the UBS Media & Entertainment conference in New York Monday, Smit said that Comcast's Infinity2Go service, which utilizes the Clearwire network, will be discontinued in an orderly fashion over the next six months. While the SpectrumCo sale will likely take up to 12 months to receive the necessary regulatory approvals, Comcast expects to start rolling out various packages with Verizon Wireless in four markets early next year.
"The teams are already engaged; they are great commercial arrangements and we think we've put together great packages that combine the best of the various bundles," Smit said. He added that the offerings don't necessarily have to be a quad-play of wireless, video, voice and data, but could be a triple play with three of those four products or home security.
"It offers us a couple of different combination plays and ultimately more choice for the consumer," Smit said.
While the Verizon deal trumps an earlier wireless agreement with Clearwire, Comcast will continue to hold its minority 9% equity interest in Clearwire for the "foreseeable future."
Comcast was one of several companies that agreed to invest in Clearwire in 2008, including Time Warner Cable, Bright House, Intel and Google. The hope was that the cable companies could tap into Clearwire's national WiMax networks, offering a true mobile solution.
But it didn't quite work out as planned. Clearwire quickly ran out of money as costs mounted for its national buildout and in the meantime new technologies, particularly LTE, surpassed WiMax as the network architecture of choice. All of the cable partners declined to continue funding Clearwire, which received a last minute cash infusion from its largest partner Sprint in November.
Also at the UBS conference, Comcast chief financial officer Michael Angelakis said that Sprint understood why Comcast and the other partners decided to go with Verizon Wireless.
"I think there is some recognition that we're setting a bit of a different strategy and I think they understand it and from a business perspective congratulated us. That was a first-class thing to do," Angelakis said.