Cable Companies In Talks to Fund WiMax Network
Wednesday, March 26, 2008
Comcast and Time Warner Cable are in talks to invest in a wireless company based on WiMax technology, according to a source familiar with the talks.
The company would be operated by Sprint Nextel and Clearwire, which have focused over the past year on building a network based on WiMax, said the source, who spoke on condition of anonymity because talks are ongoing.
With the new company, the cable providers would be taking direct aim at the nation's biggest wireless carriers, Verizon Communications and AT&T, which have pushed aggressively into Internet and television services.
Comcast would invest $1 billion and Time Warner would put as much as $500 million into the venture to create a next-generation, high-speed wireless network spanning the nation, according to the source.
Comcast and Sprint declined to comment on speculation about the negotiations.
Such a venture is part of a race by wireless carriers and cable companies to become the main source for Internet, phone and television services, according to Julie Ask, an analyst at Jupiter Research.
Verizon entered into competition with Comcast and Time Warner Cable through its FiOS fiber-optic network, which offers television services.
"Comcast and Time Warner are home-, broadband- and PC-oriented, so WiMax as a choice to get into wireless makes sense for them," Ask said. "But whether or not they should be their own network or lease capacity from Sprint or Clearwire is something for Wall Street analysts to judge."
Intel and Google are also involved in the discussions about the new venture, according to the source. The companies have signaled their interest in joining with Sprint and Clearwire to form a WiMax nationwide network.
Sprint and Clearwire have been trying to raise $3 billion to build a WiMax network. Many analysts see WiMax as the biggest bet for the future for Sprint, which recently moved its headquarters from Reston to Overland Park, Kan., in a major restructuring. Sprint lost 1 million wireless subscribers to other competitors in the past year.