Update: In a press release and conference call today, Sprint and Clearwire have announced the formation of a new company that will be publicly traded on the NASDAQ exchange and operate under the Clearwire name.
Under the new agreement, Sprint would own 51% of the operator with 27% owned by current Clearwire shareholders, and the remaining 22% being owned by the investor group comprised of Comcast, Google, Time Warner Cable, Bright House Networks, and Intel through the Intel Capital investment division.
The transaction is expected to be fully completed by the 4th quarter of the year and the initial investment is expected to lead to a target share price of $20 per share of the new company. Under the new arrangement, the new Clearwire is expected to cover 120 to 140 million in 2010, expanding on the initial expectations set by Sprint to cover 100 million by the end of the year.
Google has committed to developing applications, search solutions, and its Android platform on the new network and select devices on Sprint’s CDMA network while Intel has committed to deploying WiMax on the current and next generation Centrino platforms. The aforementioned cable providers will also gain wholesale access to the Sprint CDMA network in order resell products and services in a bundle package with other cable services.
The Wall Street Journal has filed a report stating that Sprint will announce that it has reached an agreement with Clearwire to merge the XOHM WiMax commercial unit with the WiMax services provider founded by Craig Mc Caw in a deal worth $12 billion.
Most of the current initial funding totaling $3.2 billion for the new company will come from Comcast, Intel, Time Warner, and Google. An official announcement is expected as soon as Wednesday morning.
From the initial press conference detailing Sprint’s selection of the technology in 2005 as its 4G platform to the beginning of restricted testing in 2007 Sprint’s WiMax venture has been seen as both an asset and a liability in terms of deployment costs, manufacturer support, and viability.