Clearwire connects for entertainment network
EmptyMovies 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 be called 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 year's end, Clearwire will begin selling WiMax services back to the cable partners, and then the cablers can sell the services.
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, with Bernstein Research analyst Craig Moffett calling cable competitors DirecTV and Dish Network the "odd men out." (partialdiff)