Sprint, Clearwire Form Team WiMAX

Yeah, the summer has been a little boring in the financial world. Inflation fears, a few blockbuster earnings reports, and downright weird behavior from a CEO haven't been enough to pique investors' interest. But what about a major collaboration between broadband giants to overthrow the status quo and bring lightning-fast mobile broadband to the masses?

Sounds good to me. And it sounded really good to investors in Clearwire (Nasdaq: CLWR  ) , the new teammate of Sprint Nextel (NYSE: S  ) in a pact to accelerate deployment of WiMAX networks. Shares in Clearwire closed 34% higher on Thursday, giving the cash-bleeding, earnings-challenged firm a market capitalization greater than $5 billion.

The deal calls for the two companies to collaborate on developing and building a nationwide mobile broadband network based on WiMAX technology. Each company will be responsible for portions of the network, swapping some spectrum licenses in the process. The companies will also jointly market the new services, set to launch in the first half of 2008. I wonder what they'll call it -- SprintClearMax?

The partnership should accelerate the deployment of WiMAX networks and dramatically cut the costs each company would have shouldered individually. This is good news, particularly for Sprint Nextel, which has been under pressure from shareholders to fix internal operational issues before going on a big spending binge with next-generation WiMAX plans.

The news is bound to spur high-fives from fans on the sidelines as well -- Intel (Nasdaq: INTC  ) and Motorola (Nasdaq: MOT  ) are both big proponents of mobile WiMAX networks. But what's that? Do I hear a few boos coming from somewhere in the crowd?

Oh, that must be Qualcomm (Nasdaq: QCOM  ) , or maybe an AT&T (NYSE: T  ) or Verizon (NYSE: VZ  ) fan in an oversized foam hat -- they're not big fans of Wi-Fi or WiMAX. Incumbents tend to be ardent home-team boosters, you know.

The announcement is only a letter of intent, and referees may blow the whistle on the play. The Department of Justice and the Federal Communications Commission will be reviewing the replay tape and could interfere with the deal. But I suspect the two new teammates will successfully break any tackles to make nationwide WiMAX mobile broadband a reality next year.

More broad-banded Foolishness:

When playing team sports, Fool contributor Dave Mock is far more familiar with the agony of defeat than the thrill of victory. He owns shares of Motorola, Intel, and Qualcomm. Intel is an Inside Value recommendation. Dave is the author ofThe Qualcomm Equation. Hut-one-hut-two -- the Fool's disclosure policy won't drop even a sloppy snap.


Read/Post Comments (0) | Recommend This Article (6)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 532258, ~/Articles/ArticleHandler.aspx, 10/24/2014 5:49:12 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement