US providers Sprint Nextel and Clearwire have agreed to pool their resources to meet the massive costs of building a mobile WiMax network.
The vendors will work together to take the network coverage to 100 million people by the end of 2008, and will jointly sell wireless broadband to businesses and consumers, as well as offering services to the US government and public safety agencies.
"By working together, a nationwide network becomes possible," said Ben Wolff, Clearwire chief executive, at a press conference. The deal would "fundamentally change the communications landscape in this country," he said.
Sprint Nextel announced its plans for a WiMax network - the world's largest - almost a year ago, but rumours began surfacing in recent months that it could not meet the roll-out costs alone. Clearwire's plans, backed by venture capital from Intel, have been less specific till now.
The two companies plan to reach 100 million customers by the end of 2008, and eventually many more. Sprint Nextel will build out about 65 percent of the network, and Clearwire will build out the remaining 35 percent, and the network will be sold under one brand.
The WiMax service will compete with and compliment existing broadband services, said Gary Forsee, Sprint Nextel chairman and CEO. The agreement still needs to be finalised, and it will be subject to regulatory approval by the US Department of Justice, while the spectrum transfers must be cleared by the US Federal Communications Commission.
Sprint Nextel will focus on geographic areas covering approximately 185 million people, including 75 percent of the people located in the 50 largest US markets, while Clearwire will concentrate on areas covering approximately 115 million people.
A year ago, Sprint Nextel announced its plans for a nationwide WiMax network. The partnership with Clearwire allows Sprint Nextel to invest less money to create a nationwide network, Forsee said. The agreement will also allow the two companies to provide customers with "more breadth and depth of support," he added.
The partners said the wireless network will provide broadband-speed mobile Internet access to customers (read the CTO's technology description, and another take on whether WiMax can replace cellular). The agreement will enable "seamless" roaming across the network, Forsee said. WiMax is designed to operate more than five times faster than current 3G mobile networks.
The arrangement will allow the exchange of spectrum between Sprint Nextel and Clearwire to enable each company to build out its portion of the network and to enhance service in its buildout territory, the companies said. Clearwire will be able to use some of Sprint Nextel's wireless infrastructure.
In the UK, Pipex is planning a WiMax service with support from Intel.