In a major bet on WiMax wireless internet, Sprint Nextel and Clearwire said on Wednesday they would combine their networks in a new company with investment from Google, Intel and others.

The new company, to be named Clearwire, will deploy a nationwide WiMax network that will "dramatically enhance the speed and manner in which customers access all that the Internet has to offer at home, in the office and on the road," according to a joint statement.

The new venture offers a big boost for WiMax, which allows computers to access the Internet wirelessly with a wider reach than the popular Wi-Fi technology.

WiMax uses a licensed channel of radio spectrum and can transmit, according to its backers, to an area as large as 50 kilometres with a stronger signal than Wi-Fi and access faster than most current devices.

The new firm will have investments from internet search giant Google, computer chip maker Intel, cable firms Comcast and Time Warner Cable and service provider Bright House Networks. The firms agreed to invest a total of $3.2-billion in the new company.

"Power of the mobile internet"

"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," said Clearwire Chairperson Craig McCaw, who would become non-executive chairperson of the firm to be based in Washington state.

"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 US to a leadership position in the global wireless industry."

Yankee Group, a research firm, estimates that 58-million people worldwide will use WiMax by 2012. Other WiMax projects are being deployed in Europe and Asia.

The new Clearwire will cover a region with between 120-million and 140-million people in the US by the end of 2010.

Upon completion of the deal, Sprint will own the largest stake in the new company with some 51 percent equity ownership.

Clearwire shareholders will own around 27 percent and the new investors, as a group, will be acquiring an estimated 22 percent.

The venture marks a new direction for Sprint Nextel, which has been struggling as a wireless telecom provider and looking at alternatives, and provides Google with more reach into the wireless field, analysts said.

"That means, among other things, that Google could become a mobile carrier (think GPhone) or an internet service provide although the announcement says it has no current plans to do so," said Greg Sterling at Search Engine Land.

"It also gets precise location targeting on the network for desktop/laptop and mobile ads."

Google product manager Larry Alder said in a company blog: "We believe that the new network will provide wireless consumers with real choices for the software applications, content and handsets that they desire. Such freedom will mirror the openness principles underlying the internet and enable users to get the most out of their wireless broadband experience."

"Disaster waiting to happen"

But Erick Schonfeld of the technology website TechCrunch said: "This is a disaster waiting to happen."

He added: "Sprint and Clearwire need the deal to try to salvage the billions they've already sunk into their money-losing WiMax networks.

"But putting more cooks into the kitchen with different WiMax aspirations is not going to help. Google wants more wireless broadband alternatives for its planned mobile apps and advertising. Whereas the cable companies want a way to compete against mobile phone operators encroaching on their turf."

Dan Frommer of Silicon Valley Insider said the new Clearwire project "has a big task ahead: Build a massive, high-speed wireless network from scratch, and then convince enough people to sign up for it that it's profitable."

He added: "With big investments (and promises for promotion) from cable giants, Intel and Google, Clearwire has potential. But its success isn't guaranteed."

AFP