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WiMax Set to Take Off

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After many fits and starts -- and even near brushes with death -- it looks like a new nationwide broadband network based upon WiMax technology is set to spread across America. With a combination of assets and new cash funding now in place, the new and improved Clearwire (Nasdaq: CLWRD  ) is set to compete for consumers' dollars with its own wireless broadband alternative.

Even with the turbulent credit markets, the extreme makeover announced this past May has gone through as scheduled. The deal shifts spectrum and network assets from Sprint Nextel (NYSE: S  ) to Clearwire and also contains $3.2 billion in fresh cash from WiMax backers Comcast (Nasdaq: CMCSA  ) , Intel (Nasdaq: INTC  ) , Time Warner Cable, Google (Nasdaq: GOOG  ) and Bright House Networks.

The partners in the deal want to make Clearwire's wireless broadband service a cheaper and faster alternative for mobile Internet access. So far this plan is gaining some traction, as some initial reviews of the recently launched WiMax network in Baltimore that Clearwire will now take over have been very positive. As all the interests are now unified under one network, Clearwire will start marketing all services under the Clear name rather than Sprint Nextel's Xohm.

I know it's an overused cliche today, but I've been saying that WiMax is too big to fail for a long time now. The WiMax platform offers the best chance yet for computing powerhouses like Intel and Google to wrestle away some of the dominance telecom service providers like AT&T (NYSE: T  ) and Verizon (NYSE: VZ  ) hold over consumers.

Sometime early next year, investors will get to hear more details about the network rollout plans of Clearwire. It will take quite some time -- and a lot more money -- to reach the levels of ubiquity that traditional cellular providers now have in their nationwide networks. But if Clearwire and friends can pull off a deal of this size in one of the worst market environments seen in years, I'm thinking they have a good chance to ride out future financial storms as well.

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Fool contributor Dave Mock is really good at magic, as long as the audience is just his kids. Dave owns shares of Intel. Sprint Nextel and Intel are Inside Value recommendations. Google is a Rule Breakers selection. The Fool owns shares of Intel. The Fool's disclosure policy can go through a paper shredder and then be pulled out of your ear intact.

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  • Report this Comment On December 01, 2008, at 4:35 PM, mileageguru wrote:

    This is the confirmation that WiMAX is here to stay, at least for a few good years until LTE takes off. Clearwire doesn't see LTE as an competing technology instead they will use LTE too if it make sense.

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