Tech firms team up to offer high-speed WiMax
Tech firms team up to offer high-speed WiMax Last Updated: Wednesday, May 7, 2008 | 9:37 AM ET CBC News
A who's-who of media and technology companies are joining forces to create a new venture that promises to deliver web access for cellphones and laptops at much faster rates than currently available.
On Wednesday U.S. wireless provider Sprint Nextel Corp. announced its next-generation wireless broadband business was teaming up with wireless start-up Clearwire Corp. to create a new $14.55 billion US wireless communications company.
The combined company, called Clearwire, would focus on WiMax, which has been touted for years as providing superior wireless broadband with much greater range and speed than current Wi-Fi technology.
WiMax — short for Worldwide Interoperability for Microwave Access — is capable of delivering wireless broadband connections at speeds of 70 megabits per second or more across an area of up to 64 kilometres. It's faster than many current fixed-line broadband connections, which typically offer speeds of about two megabits per second.
Sprint and Clearwire had already announced their intention to build a WiMax network but said they were looking for outside funding.
They found it in some big players in the technology, communications and media industries. Sprint announced Wednesday that chip maker Intel Corp., internet search leader Google Inc., cable-TV giants Comcast Corp. and Time Warner Cable Inc. and cable company Bright House Networks have agreed to invest a combined $3.2 billion US in the company, at a target price of $20.00 per share.
Sprint said it will own the largest stake in the company with approximately 51 per cent equity ownership; existing Clearwire Corp. investors will own 27 per cent and the five investors will, as a group, own approximately 22 per cent of the new company.
Intel to ship chips this summerThe deal gives the cable operators a new outlet to increase their customer base, allows Google Inc. to reach more customers through wireless devices, and will provide new support to Intel's WiMax technology. Intel had announced earlier this year it would begin shipping computer chips enabled with WiMax receivers beginning this summer.
"This agreement is a historic step forward for WiMAX, as it represents the first nationwide deployment of a next-generation mobile broadband Internet in the U.S.," said Paul Otellini, Intel president and CEO in a statement.
The new company will be led by Clearwire chief executive Benjamin Wolff, with Sprint Chief technology officer Barry West serving as president. West also leads Sprint's XOHM division. The deal is expected to close during the fourth quarter.
With files from the Associated Presscbc.ca
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