Clearwire crosses last merger hurdle and looks to India
Published: 21 November, 2008
The merger of Clearwire and Sprint Xohm to create the US' first national mobile broadband operator has crossed its last hurdle, with Clearwire shareholders voting to approve the deal. The details are expected to be finalized before year end, which would then release the $3.2bn infusion of capital from Intel, Google and three cable partners, which comes with the creation of the venture.
Although the two key entitities have had to operate as separately as possible for legal reasons until the merger was official, many of their joint strategies have become clear, and in addition to Xohm's launch market in Baltimore, construction is well underway in six other territories -
The new executive team has already been named, with Clearwire's current CEO Ben Wolff keeping that job title, and Xohm president Barry West being president and chief network architect. Clearwire's Perry Satterlee and Scott Richardson are likely to remain COO and chief strategy officer respectively, while Xohm senior VP Atish Gude will be chief marketing officer.
The company is standing by its promise to be an open access operator, despite the obvious risks of going up against the majors' HSPA and EV-DO services with no device subsidies. Branding is less certain - the Xohm brand was initially planned to be retained, to take advantage of the extensive marketing Sprint, and partners like Intel, have already done, but apparently this decision is not yet final. Another issue will be how far Clearwire's proprietary network - which generates all its revenue and increasing subscriber numbers and ARPU, even though promotion behind it has now been put on ice - will be integrated with WiMAX.
While the partners battle with these tactical issues, and key decisions like how the cablecos will access their own share of the spectrum, they are already looking beyond the highly competitive US and towards other opportunities. Clearwire has broadband wireless units in several European countries, such as Ireland and Denmark, and spectrum in several more, plus strategic partnerships in Latin America and elsewhere.
Now it is also eyeing increased influence in India, likely to be the largest market for WiMAX-based services once 2.5GHz spectrum is released next year, and already active in 3.5GHz fixed deployments. Clearwire is looking to set up a management company to develop WiMAX services for Indian operators, a move that would echo those of some other early WiMAX carriers, like Korea's KT and SKT, which are also looking to gain influence and consulting revenues from lending their expertise to operators in nearby Asian countries like Vietnam.
"India is an important market and we would look at expanding WiMAX coverage there. We are looking at forming a management company to bring together various stakeholders, including license holders, investors and those with management skills," Barry West told India's Economic Times. He said the Sprint Xohm unit is already working with Indian WiMAX carriers like Tata, BSNL and Reliance and Clearwire could even consider bidding for licenses itself next year.
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