Until the agreement was announced, both companies had aggressive plans to invest into competing nationwide networks. By combining their resources the two companies are limiting their exposure with a technology that’s not been tested on a similar scale anywhere. Clearwire will not only avoid head-to-head competition with the much larger Sprint, but will gain access to a broader network too.
Both companies will independently install and light up infrastructure in selected territories, but they’ll enable roaming between territories and share infrastructure to save money. Sprint will focus on the larger urban centers, covering areas with about 185 million people, while Clearwire will focus more on smaller cities along with suburban and rural areas.
The WiMAX network is being designed to deliver mobile broadband services in urban, suburban and rural markets, and enable significantly greater depth and breadth of services. The arrangement also is expected to enable each company to increase capital efficiency and reduce overall network development and operating costs.
Large companies such as Intel and Motorola have been big backers of WiMax. Intel is reportedly planning to embed the technology into its chips by the end of 2008, while Motorola has also hinted WiMax enabled phones could arrive next year.
Clearwire already delivers WiMax service to 258,000 customers in 39 US markets. Nevertheless, this deal could represent an important boost to take WiMax mainstream.