Sprint and Clearwire is a win for WiMAX

Sprint and Clearwire, the two companies rushing to build a nationwide WiMAX network, just announced an agreement to collaborate on building a nationwide network by the end of 2008. By working together, Sprint and Clearwire the first coast-to-coast WiMAX network and will do it sooner than by going alone. The companies plan to market mobile WiMAX services under a common service brand. This makes sense because neither company has the money to go it alone. Clearwire is a startup without much capitalization, and Sprint is struggling company with 3 networks (iDen, cdma2000 1xRTT and cdma2000 EV-DO, and WiMAX) and not much to do with it.

The 20-year partnership was aimed at “fostering quicker, broader and more efficient deployment of a mobile WiMax broadband network than either company could accomplish on its own.” The companies will build their respective portions of the nationwide network and then enable roaming for each another’s customers. In certain markets, Sprint and Clearwire will exchange spectrum licenses to use the airwaves.

Sprint will build its part of the network to cover about 185 million people, mostly in urban and suburban areas that cover 75% of the country’s 50 largest markets, and Clearwire’s network will cover 115 million people. The US population is just north of 300 million, so this seems just about right. The joint companies will have service for 100 million people by the end of 2008.

With 4G (4th generation) technologies arriving in several years and upcoming spectrum auction at 700 MHz for broadband data, the ultimate winner will not be known for many years. Right now, it looks like a match made in heaven and it looks like a precursor to an eventual takeover of Clearwire by Sprint. Clearwire is by far the bigger winner because it has been struggling to sign up customers and has a very limited footprint.

Update: WiMAX is still not in a position to threaten cellular, not for another 2-3 years.