A who’s who of technology and telecommunications companies announced
Wednesday that it intended to build the first of a new generation of nationwide
wireless data networks.
The partners have put the value of the deal at $14.5 billion, a figure
that includes radio spectrum and equipment provided by Sprint Nextel and
Clearwire, and $3.2 billion from the others involved.
In many ways the new venture is a win-win situation for Sprint and Clearwire,
which, if truth be told, had no other option than to team up. Sprint, which has
steadily been losing customers after its failed 2005 merger with Nextel, gets to
shed an expensive and resource sucking venture. And Clearwire, which hasn’t been
profitable since it went public a year ago, gets more spectrum assets and
capital to build the network. Wall Street had been getting fed up with each
company, so a deal to merge the entities was a no-brainer.
But as someone who has watched big technology mergers form and unwind over the past decade, I’m not convinced that the new Clearwire will actually make it in the
end. That said, I think at the very least the new company will spur quicker innovation of broadband wireless technology and force operators like AT&T
and Verizon Wireless to deploy their own networks more quickly. In this respect,
consumers will likely have Sprint and Clearwire to thank for helping bring true
wireless broadband services to a plethora of consumer electronics devices.
But the big question yet to be answered is whether the new Clearwire will be the company delivering that network and whether WiMax, its technology of
choice, will be used to do it.
I’m sure we’ll see more of this soon. I like the idea of WiMax (2 mile range!), but I do wonder about two issues: (1) can a company make money nationally on this? and (2) let’s see some more competition around a single standard!