Goodbye Xohm, Hello New Clearwire JV

Author: Philip Solis, Principal Analyst, Mobile Broadband

Tue, 6 May 2008 18:32:24 EDT

The WSJ is reporting that Sprint and Clearwire have reached an agreement, along with Intel, Google, and cable operators Comcast, Time Warner Cable, and Brighthouse.  The spun-off 4G group from Sprint and Clearwire are valued at approximately $9 billion, and with the additional $3.2 billion in financing from the additional companies that are forming this joint venture, the new company will be valued at over $12 billion.

Comcast: $1.05 billion
Intel: $1 billion
Time Warner Cable: $550 million
Google: $500 million
Brighthouse: $100 million
TOTAL: $3.2 billion

This is huge news for the WiMAX community and for the mobile network and mobile operator worlds in general, as everyone has been looking to Sprint to lead the way.  This new joint venture will drop the Xohm name and retain the Clearwire name.  While Sprint will own a majority of the new Clearwire, Clearwire will have operational control over the company to alleviate any fears of conflict of interest with Sprint.  These three cable companies will soon have a mobile wireless network on which to offer new services, such as content delivery and streaming to handsets and mobile PMPs.  The cable companies will also offer voice service, and we suspect this will be through arrangements to use Sprint's CDMA 1x network.  See our upcoming ABI Insight on this subject for our views on what this joint venture means to various companies.

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