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Broadband/Communications

It Finally Happened

By Parks Associates, May 07, 2008

The rumors surrounding Clearwire and Sprint over the past several months have made Hollywood Paparazzis jealous. It finally happened. Mr. McCaw, the master of big deals strikes again. After many rounds of negotiation, Sprint, Clearwire, and their partners ironed out all the details in a highly complex deal. Clearwire will merge with Sprint's Xohm division to form a $14.5 billion WiMAX venture, which will blanket the country with high speed WiMAX networks. Investing partners include Intel, Google, Comcast, Time Warner, and Bright House. Sprint will own about 51 percent of the new company and Craig McCaw will own about 27 percent. Comcast, Time Warner Cable, Intel, Google and Bright House will get a combined 22 percent. Ben Wolff will act as CEO and Barry West President.

The new Clearwire will leverage the combined 2.5GHz spectrum asset of the two companies and Sprint's existing towers. It plans to retail WiMAX triple play services and also wholesale wireless HSD to Sprint and cable MSOs. As we have predicted, WiMAX will become a contender in the U.S. Involved parties have too much to lose if the technology doesn't take off. The venture, now with strong financing, needs to immediately focus on integration and operational tasks. It cannot afford the mistakes of Sprint's Pivot experiment.

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