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__A new report from TheStreet claims that Sprint and Clearwire could be reuniting thanks to a $2 billion investment from another WiMax champion, Intel.
Before Sprint tore up the existing WiMax agreement it forged with Clearwire, the plan was to split the cost of building a nationwide network between the two companies. That would have allowed eventual customers to easily roam between the two networks and, at the same time, lessen the financial burden on Sprint and Clearwire. It was a good plan given build out costs are expected to reach $5 billion.
Unfortunately, when Sprint lost its CEO and primary WiMax champion Gary Forsee last year, it lost Wall Street's confidence as well. In fact, the company has faced substantial backlash from investors who, even before the Sprint/Clearwire deal dissolved, felt that shelling out $2.75 billion (Sprint's half of the build-out cost) for a next-generation wireless network wasn't the best use of the company's money. The deal was eventually scrapped and Sprint would only say that the two companies couldn't agree to terms.
Intel, Sprint and Clearwire all said they wouldn't comment on the rumor, but Monday's article, as well as previous reports from the Wall Street Journal, claim that an announcement could be made as soon as this week.
If true, this wouldn't be the first time Intel's investment arm has helped prop up beleaguered WiMax backers. When Sprint broke up with Clearwire in November over "complexities" in the WiMax business plan, the former company reaffirmed that it would still somehow come up with the $5 billion needed for WiMax build out. Much of the money would have likely come from Intel and other WiMax partners anyway. In July of 2006, Intel and Motorola also invested a total of $900 million ($600 million from Intel Capital, $300 from Motorola) in Clearwire, a company that has admitted it remains dependent on commercial partners to help develop and deliver the equipment for its existing and planned WiMax networks. Indeed, Clearwire's entire future is riding on the success or failure of WiMax.
Intel has also invested millions in WiMax development on its own and has forged partnerships with a handful of notebook makers like Lenovo, Panasonic, Acer and Toshiba -- all of whom will be releasing notebooks during the second half of 2008 that will feature Intel's next-generation Centrino mobile platform with an integrated Wi-Fi/WiMax module. The last thing Intel wants is for those notebooks to hit the market with no networks in place.
"We need new devices, services and new products, and I think the future of ultra mobile is closer than we think," Otellini said at last year's Intel Developer Forum. "WiMax, from our respective, will be the network that provides that."
I guess no one ever said this ultra mobile future was going to come cheap.
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