Spinoff Gives Sprint, WiMAX a Second Wind

Meanwhile, the new Clearwire expects to offer mobile wireless Internet services on a broad array of new devices — handsets, consumer electronics and more — that will be made possible by integrated WiMAX chipsets and a commitment to an open architecture. One of the most strategic of the new company’s investors is Intel Corp., which pitched in $1 billion and has pledged to work with manufacturers to embed WiMAX chips into Intel Centrino 2 processor technology-based laptops and other Intel-based mobile Internet devices. It also will act as a distribution partner, and will market the Clearwire service in association with Intel's performance notebook PC brand.

To bolster its open-access bona fides, Clearwire has partnered with buzz kid Google Inc., another strategic investor, to develop Internet services, advertising services and applications for 4G. Google also will naturally be the search provider, while Clearwire will support Google's open-access Android operating system software in its future voice and data devices. Google and Intel have options to enter into 3G and 4G wholesale agreements with Sprint and Clearwire, respectively, but so far have no plans to do so.

“The transition from having Internet connected to a location to it being connected to a person means that a revolution has begun,” said Wolff. “Our road map is clear and unencumbered, and we are fundamentally changing the game with open access.”

In 2008, Clearwire will launch express cards in existing markets, and mobile WiMAX PC cards, USB-driven devices and embedded chipsets in PCs will happen later this year. “In 2009, we expect the game to change again, with WiMAX chipsets embedded in products of all shapes and sizes,” said Wolff. “Today that [model] is available only in a wired environment. We think this mitigates any perceived risk about our business, because this is a game-changing business model.”

Consider: In the Portland, Ore., trial the network is delivering 6mbps downlink and 2 to 3mbps up, while whizzing along at 60mph on the freeway.

Sprint Relieved

For its part, Sprint still benefits as the majority stakeholder, with decreased risk. It won’t be involved in the day-to-day operations at Clearwire, said Hesse, but it will have strategic input on the portfolio and the go-to-market strategy. And, it will become an MVNO for the 4G services, to bundle those in with its existing services.

“This way we can focus time and resources on core operations,” said Hesse. Meanwhile, Sprint has new 3G resellers in Clearwire and the cablecos that are strategic investors in Clearwire. And, Clearwire is a new customer for infrastructure and other core services as noted earlier.

There have been months of speculation as to how the financially struggling Sprint could press ahead, or not, with its plans to build out the nationwide WiMAX network (price tag: $5 billion) considering massive profit losses and criticism from investors that it has lost focus on its core businesses.