Sprint Nextel and Clearwire will form a joint venture worth US$14.5 billion to deploy the first nationwide mobile WiMax network, they said Wednesday.
The new company, which will be called Clearwire, is also backed by Intel, Google, Comcast, Time Warner Cable, and Brightcove Networks. They have collectively agreed to invest $3.2 billion into the new company
The deal, widely rumored, provides a much needed boost for Sprint and Clearwire -- and also for mobile WiMax technology as it competes with systems based on CDMA (Code Division Multiple Access) and GSM (Global System for Mobile Communications) for the build-out of mobile broadband networks.
Sprint will own the largest stake in the new company, approximately 51 percent, and the existing Clearwire shareholders will own about 27 percent. Intel and the other investors will be acquiring approximately 22 percent.
Ownership and investment are all based on a target price of $20 per share of Clearwire's common stock, subject to a post-closing adjustment.