Clearwire Corp. and Cisco Systems Inc. have formed an alliance to expand WiMAX services throughout the United States.
In a Wednesday release, Clearwire (Nasdaq: CLWR) said that Cisco (Nasdaq: CSCO) will provide core infrastructure for Clearwire’s national network and build new mobile devices compatible with Clearwire’s Clear 4G mobile WiMAX service. Financial terms of the alliance weren’t disclosed.
WiMAX technology allows wireless service at much faster speeds than 3G networks.
Overland Park, Kan.-based Sprint Nextel Corp. (NYSE: S) is majority owner of Clearwire, which includes Sprint’s former WiMAX unit. The deal to form the new Clearwire closed on Nov. 28 in a $14.5 billion deal that combined Sprint and Clearwire’s WiMAX assets and included $3.2 billion from several strategic investors.
As part of a multiyear network build-out plan with Cisco, Clearwire said in Wednesday’s release that its Clear 4G mobile service will be available in more than 80 U.S. markets by the end of 2010. Cisco aims to introduce its first mobile WiMAX device later this year.
Clearwire currently provides mobile WiMAX services in Baltimore and Portland, Ore. The company expects to spend $1.5 billion to $1.9 billion this year of the more than $3 billion it received from investors to launch WiMAX this year in cities such as Atlanta, Las Vegas, Chicago, Dallas/Fort Worth, Honolulu, Philadelphia and Seattle. Launches next year are expected in New York, Boston, Washington, Houston and the San Francisco area. The company expects to reach as many as 120 million people by 2010.
Cisco, based in San Jose, Calif., projects that mobile data traffic will increase one thousandfold between 2005 and 2012. The company said that a single high-end data phone today generates more data traffic than 30 basic-feature cell phones, and that a single laptop air card generates more data traffic than 450 basic-feature cell phones.
Clearwire, based in Kirkland, Wash., is scheduled to release its first-quarter financial report after the market closes on Wednesday.
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