As Tom mentioned earlier, Sprint Nextel Corp. (NYSE: S) is merging its next-generation wireless assets with Clearwire Corp. (NASDAQ: CLWR) to form a new joint partnership that -- finally -- will create a high-speed wireless internet network that covers most of the U.S. Although Sprint's Xohm service has been decried by investors as a "non-core" asset weighing down Sprint's pocketbook, it still has enormous potential in the near future. Sprint's not in terribly good shape -- but it does have vision. Of course, vision and execution are two different things.
So, it is pleasing to think that if the new Sprint-Clearwire venture can build out is national presence successfully and capture customers tired of limited high-speed internet service, the world will be its oyster. Of course, other companies are contributing to the venture as well, including Google, Inc. (NASDAQ: GOOG). Why would Google want to put money into this? Because this could be Google's most important investment ever.
Bypassing the telephone and cable companies that have a stranglehold on most of the high-speed internet business in the U.S. has long been the dream of Google. It doesn't want a middleman in the way of it connecting consumers and businesses with the information they seek. Although Google wasn't successful in the recent FCC radio auctions (maybe by design), finding a way to provide internet service directly to its customer base would give Google on a much more powerful perch than it has even today. Google could even buy the new Clearwire partnership outright once it's established.
I think they're starting to get giddy in the Google board room.
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5-07-2008 @ 6:45PM
NewsVisual said...
In an announcement on Tuesday, Clearwire Corporation (NASDAQ: CLWR) and Sprint Nextel Corporation (NYSE: S) said that they were jointly forming a new wireless communications company that will usher in the next generation of Internet services. The new company, to be named Clearwire, will provide mobile broadband experience for customers, including consumers, small and large businesses, and government agencies, and thereby dramatically enhance their ability to access high-speed Internet services, the companies’ joint statement said. "For Sprint shareholders, this is an opportunity to unlock and bring visibility to the value of our significant spectrum assets, technology and expertise, by leveraging the technology, applications and distribution strengths of our investors, who together command nearly a half- trillion dollars in market capitalization," said Sprint CEO/President Dan Hesse in the joint statement. For his part, Clearwire Chairman Craig O. McCaw emphasized the benefits the new company will be able to offer its customers when he made the following comments: "The power of the mobile Internet, which offers speed and mobility, home and away, on any device or screen, will fundamentally transform the communications landscape in our country. We believe that the new Clearwire will operate one of the fastest and most capable broadband wireless networks ever conceived, giving us the opportunity to return the U.S. to a leadership position in the global wireless industry.” Despite the palpable benefits that this joint venture offers to both Sprint and Clearwire, it might not have ever come to fruition without some high-level personal ties between the two companies.