Sprint Hopes Clearwire Deal Will Save WiMax

The seven-way partnership, which comprises Sprint, Comcast, Time Warner Cable, Intel, Google and Bright House Networks, along with Clearwire, is expected to build a massive network based on the emerging WiMax wireless technology which is capable of covering large areas with wireless access for laptops, mobile devices and other wireless solutions at breakneck speeds -- up to five times faster than traditional networks and with a broader range than Wi-Fi, which is better suited for small areas.

Essentially, WiMax is a standards-based wireless broadband technology that one ups current 3G wireless networks. Soon, WiMax chips will be embedded into laptops, phones, PDAs and other devices to allow users to wirelessly access multimedia applications like live video conferencing, recorded video, games, large data files and more, anywhere in the network's coverage area.

The massive investment on the part of the consortium comes as many experts questioned whether WiMax is all that it has been cracked up to be. Recently, WiMax deployments have been delayed and put on the back burner. The Clearwire investors said they hope the power-in-numbers attack and the combination of Sprint's 3G with Clearwire's 4G technologies will bring the struggling wireless technology back from the brink.

"This agreement is a historic step forward for WiMax as it represents the first nationwide deployment of a next-generation mobile broadband Internet in the U.S.," said Intel president and CEO Paul Otellini. "The agreement also signifies growing industry support for WiMax. Given its flexibility, coverage and speed, WiMax will enable the mobile Internet and is already opening doors to a host of new and exciting applications, devices and business models around the world."

For Sprint's part, the carrier ponied up $7.4 billion for the venture, making it a 51 percent stake holder. Before joining forces with the others, Sprint was poised to drop $5 billion on its own WiMax network, but since the technology is still in its infancy, Sprint investors were critical of the investment. Last month, Sprint announced it would not hit the scheduled April launch for its XOHM WiMax service, noting it would hold off until later in the year. At the time, Sprint CTO Barry West said the delay, in part, was because Sprint was struggling to set up the backhaul connections required for the WiMax network. Additionally, early WiMax trials in Chicago and Washington D.C. weren't performing up to snuff. That, coupled with the necessary $5 billion investment, stalled the project.

But according to Sprint, attacking WiMax with several partners will help Sprint save money, since it will use Sprint's existing broadcast wireless towers and its wired fiber network.

Under the agreement, Sprint and the cable companies will rent space on the network and offer wireless Web services under their own brands, with the cable companies also planning to sell Sprint's current lineup of voice and data services.

NEXT: Too Many Cooks?