Sprint Xohm, Clearwire To Merge, Create Ultra-WiMax Robot - $12 billion mega-union finished, Sprint-Comcast-Google Bot To Dominate Universe
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Sprint Xohm, Clearwire To Merge, Create Ultra-WiMax Robot
$12 billion mega-union finished, Sprint-Comcast-Google Bot To Dominate Universe
(old news - 06:15PM Tuesday May 06 2008)
tags: competition · business · wireless · bandwidth · Comcast · Sprint Broadband Direct · Clearwire Wireless
It's not particularly surprising news if you've followed the courtship process, but the Wall Street Journal says that Sprint and Clearwire should soon announce a $12 billion joint venture aimed at collaboratively building out the Xohm WiMax network. According to the Journal, Sprint will merge their Xohm division with Clearwire to create an entirely new company, which will be funded by $3.2 billion in outside financing. Funding includes a billion dollar injection from Comcast, and a $550 million infusion from Time Warner Cable.

Sprint has agreed to merge its wireless broadband unit with Clearwire, a Kirkland, Wash., firm founded by cellphone pioneer Craig McCaw. The new company has raised a total of $3.2 billion in outside financing from several heavyweights – $1.05 billion from cable provider Comcast Corp., $1 billion from Intel Corp., $550 million from Time Warner Cable Inc. and $500 million from Internet giant Google Inc. Smaller cable provider Bright House contributed $100 million. The investments value the new company at more than $12 billion.
The deal finally gives Sprint the outside cash they needed, and gives Time Warner Cable, Comcast and Brighthouse Networks the ability to resell 4G wireless broadband. The deal was supposed to be announced in April, but the complicated negotiation process took longer than expected.

With the deal finalized, the new coalition can start moving quickly on trying to get the WiMax network built, in the hopes of getting an early lead on Verizon & AT&T's LTE launches. The one surprise from the Journal's report to me is that Sprint will cede control of the WiMax network to Clearwire CEO Ben Wolff, who'll be CEO at the new company. The new company will also retain the Clearwire brand, an interesting choice given Clearwire reviews around these parts (at least for the fixed WiMax variant) are consistently mediocre.

This would appear to be the death of the Xohm brand before the product even launched (a few Sprint marketing employees are going to be pissed tonight). We should have more substantive details tomorrow when the mega-deal is supposed to be officially announced.

Related:
  1. Product Spotlight: EV-DO Showdown - Verizon vs. Sprint
  2. Comcast Xohm Deal Not Happening?
  3. Xohm Deployment Ahead of Schedule
  4. Comcast Promises WiMax Bundles
  5. Clearwire Shows Off Mobile WiMax In San Fran
  6. Sprint CEO Says They're Working On Pro-Rated ETFs
  7. Comcast: The New Broadband King
  8. Clearwire CEO: FCC Approval Would Be 'Good Policy.'
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TK Junk Mail @ 6th May 06:26PM:
Comcast & TW will have significant power on BD of Directors

Looks like the 2 big cable companies will have a big say in how this new venture is run and between the 2 of them have significant power on the board of directors. Therefore, I can't see this venture as competing against the cable companies fixed infrastructure. This new venture will be used to get in to areas where cable is not widespread and also as a mobile wireless adjunct to their core business.
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Karl Bode @ 6th May 06:39PM:
Re: Comcast & TW will have significant power on BD of Directors

quote:
Therefore, I can't see this venture as competing against the cable companies fixed infrastructure.
I don't think that was ever the point. A 4Mbps wireless service is its own animal, and competes directly with HSDPA and EVDO. Comcast & Time Warner clearly just want to bang heads with ma bell.

Interestingly it looks like Cox (absent from this deal) actually wants to try and build their own 3G/4G infrastructure.
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EPS @ 6th May 06:42PM:
T-Mobile

Wonder what this means for any potential Deutsche Telekom interest in Sprint.
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TK Junk Mail @ 6th May 06:43PM:
Re: Comcast & TW will have significant power on BD of Directors

said by Karl Bode :

quote:
Therefore, I can't see this venture as competing against the cable companies fixed infrastructure.

I don't think that was ever the point. A 4Mbps wireless service is its own animal, and competes directly with HSDPA and EVDO. Comcast & Time Warner clearly just want to bang heads with ma bell.
I agree that that wasn't the point, but I'll bet many here were hoping a new wireless venture would be a new competitor to local cable and dsl providers.

P.S. If you don't have a subscription to the WSJ, you can access the full story by using this Google search link:
»news.google.com/news?as_q=Sprint···&oq=wall
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My BLOG .. .. Internet News .. .. My Web Page
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Matt @ 6th May 06:49PM:
Re: Comcast & TW will have significant power on BD of Directors

said by TK Junk Mail :

said by Karl Bode :

quote:
Therefore, I can't see this venture as competing against the cable companies fixed infrastructure.


I don't think that was ever the point. A 4Mbps wireless service is its own animal, and competes directly with HSDPA and EVDO. Comcast & Time Warner clearly just want to bang heads with ma bell.
I agree that that wasn't the point, but I'll bet many here were hoping a new wireless venture would be a new competitor to local cable and dsl providers.

P.S. If you don't have a subscription to the WSJ, you can access the full story by using this Google search link:
»news.google.com/news?as_q=Sprint···&oq=wall
That is actually a very good point. People were touting WiMAX as the 3rd great broadband hope ...
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Karl Bode @ 6th May 06:49PM:
Re: T-Mobile

DT may still buy Nextel, which Sprint is all but acknowledging was a mistake acquisition.

This is all strange to me because it leaves Sprint in the unsustainable spot of being solely a wireless voice operator in a market where the natural price point of voice service is slowly approaching zero.....
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Karl Bode @ 6th May 06:52PM:
Re: Comcast & TW will have significant power on BD of Directors

Well Intel was anyway....

Clearly BPL is the 3rd great broadband hope. :)
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EPS @ 6th May 06:53PM:
Re: T-Mobile

Well, they'd still have EV-DO- which will soon enough be in direct competition with "the new" Clearwire... plus, the article seems to imply that Clearwire will also offer standard wireless voice, though I suppose it could be in partnership with Sprint rather than some sort of VoIP-over-WiMAX, I guess.

This deal does seem to leave Sprint without a future, though...
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adisor19 @ 6th May 07:03PM:
Re: T-Mobile

Maybe Sprint will wake up and announce a migration to LTE for their cell network ? One can only hope..

Adi
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Karl Bode @ 6th May 07:04PM:
Re: T-Mobile

EVDO will become irrelevant in the face of WiMax and LTE.

The whole move reeks of desperation, and maybe Sprint's new CEO gave up more than he should have in negotiations out of a need for survival. I need more data on the precise nature of the deal....
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ihateskapunk @ 6th May 07:09PM:
Re: T-Mobile

this is the best news for the xohm project in 6 months. i believe it desperately needed the outside funding. the biggest factor in my opinion is the ability to use comcast and time warner for backhaul now.
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Corydon @ 6th May 07:11PM:
Re: Comcast & TW will have significant power on BD of Directors

Very interesting article.

I'd also point out that if Comcast and Time Warner can offer broadband service over Clearwire, that also means they can offer VoIP, which neatly solves the problem of not being able to deliver cell phone service, and also explains the demise of Pivot.

The difference with Cox, of course, is that they don't have investors to answer to for their choices, so if they want to spend money on building out their own network, they're free to do so.

That may not be a good long term choice for them though...building out a nationwide network will be seriously expensive. I'm sure in the short term, you won't much coverage outside of Cox's footprint, while the Clearwire consortium can probably build out across the country much faster.
--
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iansltx @ 6th May 07:16PM:
Re: Comcast & TW will have significant power on BD of Directors

And John C. Dvorak ;)
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BillRoland @ 6th May 07:22PM:
Re: T-Mobile

said by Karl Bode :

DT may still buy Nextel, which Sprint is all but acknowledging was a mistake acquisition.
I don't disagree (being a Nextel subscriber pre and post merger, I know first hand how bad its gotten), but one might point out that by buying Nextel, Sprint got access to a lot of spectrum in 1.9GHz and 2.5GHz thanks to rebanding. That 2.5GHz now belongs to Clearwire I suppose.

The merger ruined Nextel and Sprint, and I will always maintain it had less to do with disparate technology and far more to do with poor planning and even worse implementation. Sprint executives simply never understood their Nextel clientele or their Nextel employees. The culture clashes are the stuff of legend now. Lets hope they're better again apart than they were together. I think everybody can agree that its really a matter of when and not if they separate. Sprint does appear to be trying to make itself more attractive for potential buyers now. Maybe that's not a bad thing.
--
"Don't steal. The government hates competition."
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niblifar @ 6th May 07:27PM:
Voltron Giant Robot

Haha, I love the Voltron picture and reference. :D

Go Ultra-Wimax Bot Go!
--
Vita est bona.
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iansltx @ 6th May 07:29PM:
Mmm, backhaul...

Sad to see Xohm go away, but the backhaul potential is interesting. Then again, Sprint has plenty of backhaul themselves (nationwide OC192 network ,remember?) it's just that they can't get enough b\w to the towers.

Interesting to see that now that Embarq is very much spun off from Sprint, Sprint is working with cable providers on this project. Guess they're no longer a telco ;)...though DT is one in Germany...hmm...though Nextel was never a telco either...

Hopefully though the new WiMax project will take on Sprint's "revolutionizing" spirit, rather than Clearwire's current "throttle for all it's worth until the customers are on the brink of leaving then charge them the cancellation fee...thrice" mentality. It'd be a shame for the "third alternative" for broadband (though really a way for the cable companies to get out beyond their current deployment at lower cost at this point) to be capped and throttled into oblivion.

Wonder what'll happen with the network marketing-wise now? Will it become a next-gen cellular network, for on-the-go access at decent speeds, but at price points high enough (and usage restrictions tight enough?) to discourage otherwise-landline customers? Or maybe the service will be offered as real wireless internet connectivity where cable won't reach...but not where it will, or at enough of a pricing discrepancy for a given speed that customers will only see the service as competition to WiSPs and satellite? Yes, I just sorta repeated myself, but just throwing things out there...

As to Sprint's situation at this point, it's sad indeed. C'mon guys, do SOMETHING...put dual T1's to all your cell sites so your broadband bandwidth hicks Verizon's and AT&T's butts, merge with Alltel to become a huge roaming (and footprint-size) carrier, pump out Rev. A capable "dumb phones" to showcase your awesome network, CellularSouth-style ETF payments to get you on their service...or maybe just launch HPPTT already!

:/
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adisor19 @ 6th May 07:32PM:
Re: T-Mobile

said by Karl Bode :

EVDO will become irrelevant in the face of EVDO and LTE.
Not sure i get that part.. did you mean to say EVDO will become irrelevant in the face of WiMAX and LTE ?

Adi
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adisor19 @ 6th May 07:34PM:
Re: Comcast & TW will have significant power on BD of Directors

said by iansltx :

And John C. Dvorak ;)
Yes, but he's been rather quiet lately on this front lol

Adi
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mrchris @ 6th May 07:38PM:
Enough with these mergers

Mergers mean less competition, less choices for us consumers.
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quientus @ 6th May 07:42PM:
Re: Enough with these mergers

Mergers in this case means we get to use the friggin thing instead of having it die. Seriously, if you want competition you need to have a product first.
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kelso @ 6th May 07:45PM:
Clearwire Reputation

Read a little about the port blocking and bandwidth capping performed by Clearwire.

It sure seems like we will get the same lousy service out of the new wiMax venture.

So much for thinking xohm would be a breath of fresh air.
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anon @ 6th May 07:53PM:
Tada

UltraClear MAXohM
12 Billion dollar deal. You could put up a lot of any kind of radio system for that kind of money. The front page story mentions Four Meg service which sounded a little low. Maybe they are planning on loading it with traffic.
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EPS @ 6th May 08:07PM:
Re: Enough with these mergers

Not much competition killed here. Clearwire and Sprint had plans for dividing up the country and working together rather than competing from early on- the original joint venture failed, but a new deal was always expected, while the other companies involved (cablecos, Google, Intel) were never going to become wireless companies on their own. (except for Cox, which isn't involved here)
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HEDP @ 6th May 08:11PM:
.

If this what needs to happen then so be it. Sprint was trying to do to much and in the end with poor management of just about everything so it would be best if Clearwire, who is focused and dedicated to WiMAX actually run and manage the show.

This now leaves Nextel and Sprint's CDMA division. Nextel will be better for the technology and it's customers to be merged with Southern link who I believes has a network entirely on iDEN technology.

Sprint's CDMA division could be left as a giant MVNO for wireless carriers like Helio, and roaming for Alltel and MetroPCS networks.

Sprint is just about done if they continue what they are doing.
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Karl Bode @ 6th May 08:41PM:
Re: Comcast & TW will have significant power on BD of Directors

Too busy trolling Mac fans....
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Karl Bode @ 6th May 08:42PM:
Re: T-Mobile

Yes, thinking faster than my fingers work....
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VansHSI @ 6th May 09:40PM:
Re: .

You have no idea what you're talking about
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VansHSI @ 6th May 09:49PM:
Re: T-Mobile

i don't think that's necessarily true. I can understand how you could come to that conclusion but obviously details behind the JV are not known.

I think Sprint will be much more involved in the JV than people think. You don't give up everything like that to just kiss it goodbye. They'll have exclusive reseller rights as well as revenue rights with sales. This is just a way to get the debt off the books.

And no i don't think i know everything or am totally correct in what i'm saying above. We'll just have to wait and see.
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hottboiinnc @ 6th May 10:39PM:
Re: .

Cricket owned by Leap Wireless is CDMA who also uses Sprint for roaming agreements and actually uses Sprint's network in some areas. You need to read up on Cricket/Leap Wireless and see what they use. Revol USA also is a CDMA provider who has built out their own regional network like Cricket but is a completely private company based in Ohio; who was once called Northcost PCS

Southern Link is the only other provider in the US that uses iDEN for their network; but their a regional company. I also doubt they don't want to pay for all the spectrum issues that Nextel has right now with first responders.
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adisor19 @ 6th May 10:48PM:
Re: T-Mobile

Well the question still stands then. What will happen with the spectrum currently allocated for their CDMA2000 cellphone network ? Will they migrate it towards LTE ? Or will they just kill the cell business all together and put everything in the WiMAX basket ? Questions.. questions..

If the sprint board has any sense left in it, they should migrate towards LTE when time will come and go with the flow if they actually intend to stay afloat.. IMO

Adi
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patcat88 @ 6th May 11:12PM:
Re: Comcast & TW will have significant power on BD of Directors

said by TK Junk Mail :

Looks like the 2 big cable companies will have a big say in how this new venture is run and between the 2 of them have significant power on the board of directors. Therefore, I can't see this venture as competing against the cable companies fixed infrastructure. This new venture will be used to get in to areas where cable is not widespread and also as a mobile wireless adjunct to their core business.
Bingo, prepare for caps and pay per byte billing on Xohm, just like Verizon Wireless and Cable Companies already do.
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HEDP @ 6th May 11:26PM:
Re: .

I didn't know if it was Cricket or some other company that had iDEN only network available so thanks for that correction. I can't really check because I am currently and it sucks to load just about any website.
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KrK @ 6th May 11:56PM:
Re: Comcast & TW will have significant power on BD of Directors

said by Karl Bode :

Well Intel was anyway....

Clearly BPL is the 3rd great broadband hope. :)
C'mon Karl, you know that Broadband by Blimp, or Zepplin, or Orbital Space Platforms is clearly the broadband path of the future!
--
"Regulatory capitalism is when companies invest in lawyers, lobbyists, and politicians, instead of plant, people, and customer service." - former FCC Chairman William Kennard (A real FCC Chairman, unlike the current Corporate Spokesperson in the job!)
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KrK @ 6th May 11:57PM:
Re: T-Mobile

I think Sprint's buying AMD.

:D
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patcat88 @ 7th May 12:03AM:
Re: T-Mobile

Nextel is ****ing useless. It runs in a proprietary band that NOTHING ELSE IN THE WORLD runs in. Not to mention microscopic channel bandwidth. DT isn't going to be going into esoteric radio products that they can't ever put under the T-mobile brand.

Also Nextel has no 3G or 4G future. Sprint turned off 3G Nextel aka WiDEN (psuedo 3G on iDEN, upto 90 kbit/s on a good day vs 21 kbit/s on traditional data).

Sprint would be a good buy for DT, it would have to keep the Sprint name and the CDMA network for a while. DT buying Sprint would give TM USA access to collocate GSM equipment on Sprint towers (TM USA has less coverage than Sprint I believe) and use Sprint's vast PCS spectrum holdings (CDMA and GSM can live inside the same bands/spectrum holdings, look at Alltel).

Also DT would do good to fire all Sprint execs that have to do with customer service, and make TM USA take over Sprint CS division. Sprint is a very good choice to flip around, their product when they get it right is great.

Also think about it, Sprint has no 4G path and no future now since it doesn't have Xohm. And its kinnda obvious that most cell providers will have to move to LTE, since all rural coverage will be LTE now (Verizon/ATT). Sprint and Tmobile will have to move to it, since Sprint already relies heavily on Verizon roaming and that feature seriously makes up for coverage holes, and TM USA needs domestic in-market roaming very badly. If Sprint stays on CDMA it will start having to pump out AWS 1700 CDMA handsets to roam on Cricket and MetroPCS as Verizon shuts down CDMA in 5-10 years.

4G CDMA is dead AFAIK. Alltel is the ONLY hope of Qualcomm making a 4G CDMA standard. Alltel still hasn't mentioned its 4G plans, but it hasn't bought any spectrum in AWS or 700.
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patcat88 @ 7th May 12:09AM:
Re: T-Mobile

CDMA2000 will get phased out, less and less CDMA2000 phones will be sold, advertising will push joe six pack to LTE phones. 4 years before CDMA shut down new phones will stop being sold. 2 years before shut down no phone activations/registrations, only phones currently on will work, nobody can add new CDMA phones to the network. 1 year before shut down people get the letter saying their phones will stop working and a new handset coupon for 1/2 off with a new contract (if contracts still exist in the industry).

Technologically, less and less spectrum will be allocated to CDMA2000, and basically the whole phase out process will be identical to TDMA phase out by ATT/Cingular/GSM carriers/a couple CDMA carriers.
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patcat88 @ 7th May 12:19AM:
Re: T-Mobile

Feels to me more like nobody/no company wants to invest in WiMAX while Sprint execs are in charge, so Sprint gave Xohm to Clearwire and retains stock/revenue returns in Xohm/Clearwire and will provide free or paid in revenue infrastructure sharing and providing/consulting services/purchasing leverage. Cable companies joining is a good thing since this will provide much cheaper or backhaul and allow Xohm/Clearwire to massively reduce its costs since telcos NEVER sell products by lamba/fiber strand, only by Mbps PVC/ATM circuits. $25K for backahul to a tower a month is nearly impossible to recoup, thats 500 customers paying $50 a month, and thats excluding ALL other costs, including the site lease for the tower.
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patcat88 @ 7th May 12:54AM:
Re: Clearwire Reputation

Clearwire and Cable Co`s make great friends, both cap and throttle and understand the importance of network management. ;)
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patcat88 @ 7th May 12:58AM:
Re: Comcast & TW will have significant power on BD of Directors

FTTT is much better, installation is as simple as putting a weight on a reel of corrosion resistant Cat5 or fiber and flushing it down the toilet.
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anon @ 7th May 07:33AM:
Re: Comcast & TW will have significant power on BD of Directors

Bingo x2. With Comcast involved? You're damn skippy it'll be pay per byte, caps, throttling, anything to screw you and maximize profit.
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wifi4milez @ 7th May 09:36AM:
Re: T-Mobile

said by Karl Bode :

DT may still buy Nextel, which Sprint is all but acknowledging was a mistake acquisition.

This is all strange to me because it leaves Sprint in the unsustainable spot of being solely a wireless voice operator in a market where the natural price point of voice service is slowly approaching zero.....
Not entirely. Sprint still has a pretty good foot in the door with regards to traditional business telecom. This is especially true in the higher bandwidth scenarios many larger business look for.
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Весна прибыла
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tc1uscg @ 7th May 10:55AM:
Re: Comcast & TW will have significant power on BD of Directors

said by TK Junk Mail :

Looks like the 2 big cable companies will have a big say in how this new venture is run and between the 2 of them have significant power on the board of directors. Therefore, I can't see this venture as competing against the cable companies fixed infrastructure. This new venture will be used to get in to areas where cable is not widespread and also as a mobile wireless adjunct to their core business.
Considering Sprint will own over half of the "new" company, they maintain the majority. I'm sure VZ and AT&T are filling the plane now with lobbyist en-route to DC trying to get this deal delayed or killed. :uhh: Can't wait to see the FCC ruling on it.
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tc1uscg @ 7th May 11:19AM:
Re: T-Mobile

said by Karl Bode :

DT may still buy Nextel, which Sprint is all but acknowledging was a mistake acquisition.

This is all strange to me because it leaves Sprint in the unsustainable spot of being solely a wireless voice operator in a market where the natural price point of voice service is slowly approaching zero.....
What you and others are forgetting, Sprint ISN'T just wireless and why people don't get that is beyond approach. Take away Sprints wireline (aka Long distance) portion you have another T-Mobile. They provide lots of backbone for cable providers VoIP network just to scratch the surface. DT would be getting T-Mobile out of paying lots of access charges and backbone access if they got Sprint. Just a thought. And no, telco's wireline portions are not dead. Those wireless calls have to travel somewhere, shomehow. ;)
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