KANSAS CITY, Mo. (AP) -- Clearwire and Sprint Nextel have resurrected their plan to offer high-speed mobile Internet service with the help of some deep-pocketed supporters.
The two companies announced Wednesday they will combine their wireless broadband units to create a $14.55 billion communications company, to be called Clearwire, that will continue developing a mobile network based on WiMax technology.
WiMax is similar to the WiFi service found in coffee shops, airports and many homes but more powerful -- and able to cover whole cities, in some cases. It promises faster speeds than the latest cellular networks for movies, games and other data services.
"The agreement enables us to get to market faster and reach a broader audience than we could have if we went alone," Dan Hesse, Sprint Nextel's chief executive officer, told analysts during a conference call Wednesday.
A similar partnership fell through last November. This time, however, the duo is getting help from a group of outside investors, including Intel Corp., Google Inc., Comcast Corp., Time Warner Cable Inc. and Bright House Networks, who will kick in $3.2 billion for the new company.
Clearwire will also receive an investment from Trilogy Equity Partners, led by U.S. wireless industry veteran John Stanton.
Overland Park, Kan.-based Sprint Nextel will be majority owner with a 51 percent equity stake. Existing shareholders in Clearwire Corp., a Kirkland, Wash.-based startup founded by cellular pioneer Craig McCaw, will receive a combined stake of about 27 percent. And the investment group will have a 22 percent stake.
Wall Street's reaction was mixed Wednesday, grateful that Sprint Nextel Corp. will be able to focus on its struggling wireless service but worried the deal may have too many moving parts to be successful.
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