Sprint, the troubled, third largest US wireless carrier, has been mulling a spin off or sale of Nextel and has been the subject of takeover rumors itself. It had ambitious plans to roll out a national WiMax network that had seemingly been placed on the back burner. However, today the company announced a major deal involving Intel, Google, Clearwire, TimeWarner Cable, and Comcast, which are all investing (roughly $3 billion) in a joint venture that will be majority owned by Sprint.
The new company will be called Clearwire and run by the existing Clearwire CEO Ben Wolff. No timetable has been announced for actual rollout of the services, although they will likely come to market much faster than proposed, competing 4G networks from AT&T and Verizon.
Here’s what Google gets in the deal: –Google will partner with the new Clearwire in the development of Internet services, advertising services and applications for mobile WiMAX devices. In addition, Google will be the search provider and a preferred provider of other applications for the new Clearwire’s retail product.
–Google will partner with the new Clearwire on an open Internet business protocol for mobile broadband devices. The new Clearwire will support Google’s Android operating system software in its future voice and data devices that it provides to its retail customers.
–Sprint and Google have also entered into an agreement related to Sprint’s mobile services, whereby Google will become the default provider of web and local search services, both of which will be enabled with location information for Sprint. Sprint will also preload several Google services – including Google Maps for mobile, Gmail and YouTube – on select mobile phones and provide easier access to other Google services.
–Google and Intel have options to enter into 3G and 4G wholesale agreements with Clearwire and Sprint respectively and have no current plans to do so.
That means, among other things, that Google could become a mobile carrier (think GPhone) or an ISP, although the announcement says it has “no current plans to do so.” It also gets precise location targeting on the network for desktop/laptop and mobile ads. For their part, the cable companies Comcast and TimeWarner get to resell Sprint/Clearwire access as part of a “quad-play” service bundle that allows them to offer wireless phone service and more fully compete with traditional telcos AT&T and Verizon, which are moving into TV.
Everything remains to be seen with the new venture, but it provides something that Google has been wanting (especially given Verizon’s backsliding on 700MHz open access) and something that Sprint desperately needs.
Here’s Google’s perspective on the venture: the future of the “open Internet.” Take that, Verizon!