Sprint Nextel and Craig McCaw’s broadband-wireless startup, Clearwire, announced Thursday a 20-year agreement to jointly build a nationwide WiMax network, eventually covering areas serving 300 million people.
The companies said the deal would result in a faster and more efficient buildout of a WiMax broadband network than either company could accomplish by itself. WiMax is a wireless-broadband technology that provides up to 15 megabits per second of bandwidth -- enough to feasibly download full-length movies and songs wirelessly, according to the companies.
Clearwire last month announced distribution agreements with EchoStar Communications and DirecTV, designed to let each of the three companies offer bundled voice, video and data services in all current and future Clearwire markets.
Under Sprint’s and Clearwire’s network-buildout plan, Sprint will focus primarily on geographic areas covering about 185 million people, while Clearwire will focus on areas covering about 115 million. Initially, the companies expect to provide WiMax coverage to approximately 100 million people by the end of 2008, with “seamless roaming” between Sprint and Clearwire networks.
The companies said they’ll work together on product marketing and development, and they intend to exchange selected 2.5-gigahertz spectrum as part of building and operating the network. Sprint and Clearwire will market mobile WiMax services under a common service brand, which has yet to be determined.
"This arrangement will result in stronger competition in the rapidly growing market for broadband services, and will provide … greater choice and faster access to a revolutionary mobile broadband technology," Sprint CEO Gary Forsee said in a prepared statement.
The Sprint-Clearwire deal isn’t yet official: The companies said the arrangement is subject to the execution of definitive agreements, expected within the next 60 days, as well as review by the Department of Justice and the Federal Communications Commission’s approval of spectrum-license assignments and transfers. The initial term of the arrangement is 20 years, with three 10-year renewal periods.
FCC chairman Kevin Martin has said that broadband-wireless services need to be "on the same footing" as wired high-speed-Internet services from cable and telephone companies. "It’s going to be important for consumers to develop that third broadband pipe as a competitor to DSL [digital subscriber line] and cable," he said at the at the CTIA Wireless 2007 conference in March.
Sprint previously announced that it will launch the initial stage of its WiMax-network deployments by the end of 2007. Clearwire and Sprint are separately working with mobile-device manufacturers -- including Intel, Motorola, Samsung and Nokia -- to develop WiMax-based products.
News of the deal sent shares of Clearwire, which went public in March, up more than 20% in morning trading Thursday. Sprint’s shares opened higher but fell back to around its previous closing price.
Clearwire, which launched its first market in August 2004, has about 258,000 customers and offers service in 40 markets in 13 states.