updated 12:50 pm EST, Mon February 18, 2008
Sprint, Clearwire & Intel
Having just confirmed new negotiations last month, Sprint and Clearwire may already be nearing a deal to merge the companies' WiMAX networks. Market publication The Street quotes anonymous sources, who say that the two are planning to start a spin-off firm with licenses for both Sprint and Clearwire's spectrums. An announcement could come as soon as this week, the sources suggest.
The grease in the cogs is said to be Intel, which is supplying $2 billion in funding for the venture. Under an earlier plan Sprint was to have paid at least $2.75 billion to expand WiMAX to 19 cities, but Dan Hesse, Sprint's new CEO, scrapped the idea in an attempt to reign in costs. Intel is likely to have stepped in to secure its own investments, since it created WiMAX and can only sell products with the technology if a national network is available. Sprint and Clearwire have continued to develop networks separately, but neither would have national reach without the other's help, or imposing roaming costs on subscribers.
Clearwire is said to be in its own state of financial peril, as while it had $1 billion in cash and investments at the end of the September quarter, $400 million was used merely in funding operations.