The wireless broadband Internet service provider Clearwire (CLWR), according to Unstrung, expects the closing of the deal with Sprint Nextel Corp. (NYSE:S)’s WiMax assets to be finalized by the end of the year.
In a deal announced in early May, Sprint and ClearWire had plans of merging WiMAX operations by forming a new joint venture. The deal has financial support starting with over $1 billion from the largest cable television company Comcast, another billion from chip maker Intel, $650 million from Time Warner Cable and its subsidiaries, and $500 million from Internet giant Google. Totaling $3.2 billion of outside investments, plus whatever cash Clearwire and Sprint combined might bring to the table.
There are, however, strong objections to the deal from AT&T (NYSE:T). The largest provider of telephone services wants the merger blocked and has asked the U.S Federal Communications Commission to deny it on the basis of a Sprint-Clearwire application being “fatally defective.”
But the Kirkland, WA-based operator disagrees. In an email to Unstrung the company said: “Clearwire continues to believe that the approval process is on track to permit closing before the end of the year. The co. is fully confident that the Sprint transaction is in the public interest, as it will increase competition, stimulate innovation and provide the first nationwide ‘true broadband’ network.”
Clearwire expects to go commercial with its first Portland, Ore., mobile WiMax deployment in the fourth quarter. This network could be followed by Atlanta, Grand Rapids, and Las Vegas. In addition, a September launch of a WiMax mobile wireless network in Baltimore is still expected.
Sprint owns spectrum licenses for the WiMax band covering more than 180 million U.S. residents while Clearwire has spectrum in the same band to serve 115 million people.
Regardless of Clearwire’s optimism, the fact is that the future of a national WiMax network remains still in question. $3.2 billion raised from Sprint/Clearwire proposed joint venture may not be enough, given what an entire network would require.