Intel has spent a lot of time and money backing WiMax as a next-generation wireless standard, and it looks like the company isn't ready to watch its partners falter just yet.
The Street.com reported Tuesday that Intel is preparing to fund a $2 billion joint venture formed by Sprint and Clearwire that would own the spectrum rights held by both companies. The two companies had previously planned to build a nationwide WiMax network but shelved those ambitions after Sprint CEO Gary Forsee was sent packing last year. Still, talks remained alive, and it sounds like they might be building to some sort of conclusion.
Building a national wireless network in the U.S. is a daunting task; this is a pretty big country. WiMax is basically Wi-Fi on Andy Pettitte Juice, designed to cover metropolitan areas with a wireless connection to the Internet. Intel has promoted the standard ad nauseam over the past few years, believing it a far easier way to bring a broadband connection to the world than wired cables.
The trouble is that Sprint is the only major U.S. carrier to commit to WiMax as its fourth-generation networking technology. AT&T and Verizon have both announced plans to build next-generation wireless data networks using the LTE (Long-Term Evolution) standard favored by the mobile phone industry. And they are in far better economic shape than Sprint.
Intel has already invested hundreds of millions into Clearwire, which has built WiMax networks in scattered cities across the U.S. A $2 billion investment would give the joint venture close to enough seed capital to dramatically expand that build-out, while allowing Sprint to dump its WiMax assets off the balance sheet and focus on keeping more of its wireless customers on board.
With plans to ship a wireless chip with both Wi-Fi and WiMax radios in due time, the reported investment would fit into Intel's strategic plans. Perhaps a little more closely than its last investment aimed at promoting Darwinian drinking contests.