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Print 12 comment(s) - last by FITCamaro.. on May 8 at 9:45 AM

Sprint will own 51% of the new Clearwire company

When Sprint first began to talk about its plans to invest $5 billion in a nationwide WiMAX network dubbed Xohm, people were excited. Then the reality of the huge cost to set up the network and financial issues with Sprint led to the realization that Sprint promised more than it could deliver.

Sprint’s WiMAX service was scaled back and delayed repeatedly due to the company’s inability to fund the project and the loss of subscribers. In the end, the best Sprint could do was produce a limited soft launch in three major cities in America.

Today Sprint announced a new agreement with Clearwire Corporation that will allow the combination of the two companies WiMAX broadband business into a new wireless company. The new company will carry the Clearwire name and will expedite the rollout of a nationwide WiMAX network.

The announcement also made public that the new company has five major technology companies as investors including Intel, Google, Comcast Corporation, Time Warner Cable, and Bright House Networks. Together these companies have agreed to invest $3.2 billion into Clearwire to fund the WiMAX rollout.

The $3.2 billion investment from the five companies will get the investors shares of Clearwire stock at a target price of $10 per share, subject to post-closing adjustment. The adjustment is to be based on 15 randomly selected days during the 30-day trading period ending on the 90th day after closing. The price per share for the stock has a cap of $23 per share and a floor of $17 per share. Trilogy Equity Partners has also announced it will invest directly in Clearwire stock.

Once the transaction is complete Sprint will hold on to the majority share of the new company with a 51% ownership and the other five new investors will hold 22% of the company as a group. Existing Clearwire shareholders will own 27% of the company.

Dan Hesse, president and CEO of Sprint said in a statement, “For Sprint shareholders, this is an opportunity to unlock and bring visibility to the value of our significant spectrum assets, technology and expertise, by leveraging the technology, applications and distribution strengths of our investors, who together command nearly a half- trillion dollars in market capitalization. We’ve made an excellent start developing XOHM WiMAX services. Contributing those advances to a strongly backed new company – in which we’ll hold the largest interest – provides Sprint with additional financial flexibility and allows Sprint management to leverage and focus on our core business.”



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Rural
By therealnickdanger on 5/7/2008 1:06:20 PM , Rating: 3
Hopefully Sprint is successful enough to tackle the rural connectivity nightmare. I'm talking about places where old phone lines prohibit DSL, cable companies won't even return your calls, and sh*tty satellite is the best you can do. I get a sliver of EVDO coverage when out at my parents' house in rural Wisconsin, but I have to hold the phone against the window. Even then, I can beat my dad's satellite download speeds... on my phone no less.




RE: Rural
By Bender 123 on 5/7/2008 5:15:08 PM , Rating: 2
Try central Wisconsin...I live in Wausau and we dont even get EV-DO...At least I am in the city so i can, during the ten minutes a month it works, use Charter Cable. Its not like we are a small town or anything, but for some reason Medford and Rhinelander get decent wireless for their trees and cows.


RE: Rural
By breethon on 5/7/2008 6:43:51 PM , Rating: 2
I have wireless internet that a private company setup using radios and towers in my area. I am in the middle of Amish country folks. Let me tell you, the service is great (other than the occasional storm that might knock me off line). I have low latency (I play COD4) and every time my ping is in line with my friends that have Comcast in Lansing (60ish). My only complaint is the speed - a meager 512k/128k connection. Wimax promises so much more in terms of speed. If Wimax is as good as what I have now, I can hardly wait!


RE: Rural
By therealnickdanger on 5/8/2008 7:48:42 AM , Rating: 2
My dad was on a similar RF service for a while. He had 1Mb up/down, but it wasn't always that fast. I brought my laptop out there once and was able to game with a solid 28-ping! It was a great service, but it would experience constant blackouts and the customer service was terrible. He wouldn't hear back for weeks at a time!! Rivernet, I believe it was called. It was really inexpensive ($35/mo?) and would have been amazing if it was reliable. In the end, he had to go with satellite. More money ($70/mo), less speed (512/256), high ping (worse than dial-up), BUT it never fails to connect. Something you need when running a business from home.

The EVDO coverage that they do have is extremely weak, it's also nearly impossible to make calls when I'm out there...


RE: Rural
By gfredsen on 5/7/2008 7:47:38 PM , Rating: 2
I live in rural Washington State. I will believe this when I see it, or use it. Too many times I have heard about internet over the electrical lines, or the next fantastic satellite service. I even had Charter come out, but when they got here they said, "Oh no, we don't provide service here." Then why did you say you did when I spoke to you on the phone?


RE: Rural
By Bender 123 on 5/7/2008 9:11:27 PM , Rating: 4
Because its Charter...Thats why.

Seriously, everyone that complains about Comcast has no idea what the true king of suckage is. At least they manage to send data through their tubes. I think that senator had toured a Charter Network center and it literally is a series of pneumatic tubes sending paper copies of websites to peoples homes...


RE: Rural
By barjebus on 5/7/2008 11:29:27 PM , Rating: 2
I work for a company that is currently developing WiMAX technology (the equipment and hardware/software itself) and I can say quite confidently say that it does indeed work, and at excellent speeds too. VoIP, streaming video, etc., anything people would want.

I would still say reserve judgment though until you've tried it. It is absolutely 100% up to the cable companies/wireless companies as to how the network is distributed, set up, configured, and what loads they decide to place on it. Line of sight issues aren't that big a deal unless you're in some crazy concrete bunker or using a crappy WiMAX product (you wouldn't believe what some companies are trying to pass off as "working" WiMAX hardware).

Sadly though, nothing is guaranteed. The standards and certification is quite clear on various aspects of WiMAX, but these are mostly standards to encourage and foster interoperability, not to ensure speed, robustness, or up times.


RE: Rural
By AlexWade on 5/8/2008 9:13:04 AM , Rating: 1
WiMAX can probably be great if and only if Sprint isn't involved. Sprint is still trying to figure out how do a 1G service right. If you build a sorry foundation, why should I trust you to build my 2nd floor? Same concept. If Sprint can't do 1G right, why should I expect any different with 4G?


RE: Rural
By FITCamaro on 5/8/2008 9:45:38 AM , Rating: 2
As a former employee of Sprint, I had excellent service in several states. They work pretty much anywhere. I will admit AT&T has better "out in the boonies" coverage. At least when I was working there. The only reason we switched to Verizon (after I no longer worked there) was because we couldn't get reception in my parents house. Under a building, fine. In an elevator, fine. Just for some reason, my parents house was an anti-Sprint zone.


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