Sprint, Clearwire Confirm Partnership on WiMax - InformationWeek

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Sprint, Clearwire Confirm Partnership on WiMax

Sprint Nextel and Clearwire have confirmed reports that they will collaborate to build out a nationwide WiMax network.

Saying they want to do for the Internet what cellular networks did for voice calls, Sprint Nextel and Clearwire Corp. this morning confirmed reports that they will collaborate to build out a nationwide WiMax network.

The agreement is set out in a letter of intent signed by CEOs Gary Forsee, of Sprint, and Clearwire's Ben Wolff. Talks between the two were first reported in the Wall Street Journal.

"The arrangement is subject to the execution of definitive agreements, which are expected to be finalized within the next 60 days," the companies said in a statement.

Rumors about some form of cooperation between the No. 3 U.S. wireless carrier, which has been beset by falling subscriber levels and poor earnings reports the last year, and the well-funded startup founded cellular pioneer Craig McCaw in October 2003 have circulated since Forsee told an investor conference last month that Sprint was exploring various options for the unit. At that time Don Stroberg, who heads up Sprint's WiMax unit, told InformationWeek that "having a coordinated, cohesive use of the 2.5 GHz spectrum makes a lot of sense from our perspective and from theirs."

The companies will not build out the network together in specific locales, but will independently install and light up infrastructure in the territories they've already targeted, and enable roaming between the two systems. They will also "work jointly on product and service evolution, shared infrastructure, branding, marketing and distribution," according to the statement, as well as exchanging selected 2.5 GHz spectrum in certain areas to optimize the network's performance.

The last agreement is significant because the Sprint-Clearwire alliance represents the strongest existing spectrum holding for wireless broadband systems in the United States. A variety of operators including Sprint rival Verizon Wireless and a Silicon Valley-backed startup, Frontline Wireless LLC, which is headed by a pair of former FCC chairmen, are expected to pay as much as $15 billion in the upcoming auction of 700MHz spectrum.

Given the expense and the technological hurdles of building out a national network based the new WiMax technology, which has yet to be fully standardized, most observers have considered some kind of Clearwire-Sprint alliance on WiMax is likely inevitable.

Clearwire says it is currently delivering WiMax service to 258,000 customers in several markets around the United States. The "soft launch" fo Sprint's network is scheduled for Chicago and Baltimore the end of the year.

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