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Clearwire Wins Winbeam

It's no Sprint Corp. (NYSE: S) merger, but Clearwire LLC (Nasdaq: CLWR)'s acquisition of Winbeam helps Clearwire in its apparent quest to be the go-to company for rural wireless broadband service in the 2.5GHz band.

The acquisition was made public late last week; financial terms were not disclosed.

Winbeam, based in Greensburg, Pa., offers wireless broadband services to portions of several Mid-Atlantic states, primarily using licensed spectrum in the 2.5GHz band. Clearwire, founded by industry maverick Craig McCaw in 2003, offers fixed wireless broadband Internet service to some 200 communities in the U.S. and Europe, in the 2.5GHz and 3.5GHz bands, respectively. It's sort of a pre-standard version of WiMax. But Clearwire has announced plans to deploy real mobile WiMax networks based on Intel silicon eventually, and Intel has announced a significant investment in Clearwire, though the chipmaker won't say how much.

"Coverage is key to any wireless company," says Phil Redman, a research vice president at Gartner. "Clearwire has a strategy that makes sense in the U.S.: Go to where there is little or no competition and provide access services that currently aren't available."

In the U.S., the 2.5GHz band is the most likely home for potential future deployments of mobile WiMax (802.16e). (See WiMax USA: Spectrum Crunch.)

Clearwire seems to be focused on small, underserved markets, leaving big-city 2.5GHz deployments up to Sprint Nextel. Sprint Nextel owns the majority -- about 66 percent -- of the 2.5GHz spectrum in the U.S., according to Redman. And as a condition of approving the recent merger between Sprint and Nextel, the Federal Communications Commission (FCC) has required the merged company to begin offering service in the 2.5GHz band to at least 15 million Americans by 2009 and to 15 million more by 2011. To that end, it behooves Sprint Nextel to stick to more populated markets. (See Sprint Nextel Hunts for 2.5GHz Service.)

Earlier this year, Sprint Nextel and Clearwire engaged in a spectrum swap.

Winbeam will operate as a wholly owned subsidiary of Clearwire. Clearwire has yet to announce plans for the spectrum it has acquired from Winbeam.

"We're continuing as is, but Clearwire clearly has better financial resources, to help us do what what we've been doing, but better," says John Bunce, president of Winbeam.

— Carmen Nobel, Senior Editor, Light Reading

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