Local Internet service provider Clearwire and Sprint Nextel finalized a $14 billion merger of their wireless broadband companies on Nov. 28.
Under the deal, Clearwire takes over Sprint’s WiMax business assets, including Xohm, and obtains Sprint’s 2.5 GHz spectrum. The new company retains the name Clearwire and remains headquartered in Kirkland.
“It’s not only a landmark day for our company, but it’s a milestone in the evolution in communication services in this country,” said Clearwire CEO Ben Wolff.
The merger is aimed to boost productivity through developing the next generation of wireless communications technology. Called 4G, or “Fourth Generation” systems, will be able to provide a comprehensive voice, data and streamed multimedia Internet service and allow “mobility and simplicity” at much faster speeds than previous generations.
Wolff noted the merged company faces stiff challenges in their efforts to roll out the new technology and capture more of the Internet broadband market, but maintained his company is uniquely positioned to take advantage of the ever increasing demand for communications performance and capacity. Clearwire reported nearly half-a-million subscribers to their Internet services in the third-quarter of 2008; Sprint reported over 50 million subscribers.
“The conventional wisdom is that underdogs can never win,” he said. “Every once in a while, they do.”
The two companies began exploring a merger in May and The FCC approved the deal Nov. 4.
In addition, Clearwire has received a $3.2 billion cash investment from Comcast, Intel, Time Warner Cable, Google and Bright House Networks.
Both company executives share a common heritage in the Puget Sound via Hunts Point telecom billionaire Craig McCaw. McCaw, who reportedly orchestrated the merger, is the current chairman of Clearwire and founded Sprint Nextel CEO Dan Hesse’s former employer, AT&T Wireless. Not all of their business dealings over the past few years were amicable, however: In a 2006 lawsuit, Sprint Nextel alleged Clearwire illegally acquired spectrum rights belonging to Sprint. The two companies later settled out of court.
With over 400 employees at their Carillon Point corporate offices, Wolff said he expects the company will grow significantly in the Seattle area over the coming years.
