- Share this article on Facebook
- Share this article on Twitter
- Share this article on Email
- Show additional share options
- Share this article on Print
- Share this article on Comment
- Share this article on Whatsapp
- Share this article on Linkedin
- Share this article on Reddit
- Share this article on Pinit
- Share this article on Tumblr
Movies and games on cell phones will get a boost through the creation of a new WiMax network to be built by a communications company born Wednesday by combining the broadband businesses of Sprint Nextel and Clearwire.
The $14.5 billion deal also involves outside investors Time Warner Cable, Comcast, Bright House Networks, Google and Intel.
The new company, which will go by the name Clearwire and be based in Kirkland, Wash., will be 51% owned by Sprint Nextel and 27% owned by existing Clearwire shareholders. The outsiders will own 22%.
Clearwire still needs to raise about $2.3 billion to build out its wireless, high-speed Internet network, so the venture is considering bringing aboard more investors.
By the end of the year, Clearwire will begin selling WiMax services back to the cable partners, and then the cablers can sell the services to their customers.
Comcast put $1.05 billion into the venture, while Intel contributed $1 billion, Time Warner Cable invested $550 million, Google $500 million and Bright House $100 million.
Wall Street seemed intrigued by the deal Wednesday, with Bernstein Research analyst Craig Moffett calling cable competitors DirecTV and Dish Network the “odd men out.”
Moffett also was enthusiastic about Google’s participation, suggesting the venture will embrace an open platform that Google may push “in the direction of location- and search-based advertising.”
Sign up for THR news straight to your inbox every day