Clearwire (CLWR) has buddied up with satellite TV players to get its wireless broadband service on the map.
The Kirkland, Wash., WiMax network operator run by Craig McCaw says it has formed a partnership with
to deliver the Internet wirelessly. There were no financial commitments to the deal, but investors sent Clearwire shares up 18% on news of the deal Thursday.
Clearwire has been burning through cash in its effort to build a national wireless network. The money-hungry business plan has hurt its stock performance since its IPO in March. The stock had been down about 20% since its debut price of $25.
The start-up is using a not-fully-standardized technology known as Worldwide Interoperability of Microwave Access, or WiMax, to provide high-speed wireless service. WiMax can deliver fast mobile connections over wider areas than technologies such as WiFi, which has hot-spot limitations.
Clearwire has expanded its service to 39 U.S. markets, largely in the Northwest and mid-Atlantic. With fewer than 100,000 subscribers in the U.S. as of March, the company needed a deal such as this to help broaden its market.
"By expanding the reach of our services through DirecTV and EchoStar, and by incorporating direct-to-home satellite video services in our own distribution channels, we believe we have an opportunity to significantly expand our business opportunity," COO Perry Satterlee said in a press release.
The only other large WiMax competitor is Sprint, which has
staked its future on this so-called 4G technology. Sprint has budgeted $2.75 billion to the WiMax effort and plans to have the service launched in 19 cities by the end of next year.
But Sprint's continued stumbles -- the
loss of a huge federal government contracting opportunity and costly
forced roll-up of its affiliates -- in the wake of its merger with Nextel have raised questions about how it can finance the WiMax effort.
Sprint has explored a deal to join its WiMax business with Clearwire, according to a story Thursday in
The Wall Street Journal
Clearwire shares rose $3.62 to $23.49 in early trading Thursday.