Seems the cable industry is getting closer to finalizing a wireless strategy. Wall Street Journal reports – that the two biggest U.S. cable providers, Comcast Corp. (NasdaqGS: CMCSA) and Time Warner Cable Inc. (NYSE: TWC), are discussing a plan to provide funding for a new wireless company that would be operated by Sprint Nextel Corp. (NYSE: S) and Clearwire Corp. (NasdaqGS: CLWR).
The cable industry has been flirting with the idea of getting into wireless for years, but hasn’t had a clear strategy.
The alliance, including Bright House Networks – would see the three cable companies investing $1.7 billion in the nationwide wireless network that Sprint and Clearwire have been struggling with great unsuccess to roll out.
The partnership would create a nationwide wireless network using WiMax technology, which is designed to provide high-speed Web access from laptops, cellphones and other mobile devices, as well as high-quality mobile video. Sprint and Clearwire have been working for months to cooperate on a WiMax rollout and are now trying to raise at least $3 billion for a joint venture.
Entering the wireless business is becoming a bigger priority for cable companies as they compete fiercely for customers with telecom giants AT&T Inc. (NYSE: T) and Verizon Communications Inc. (NYSE: VZ).
Sprint CEO Dan Hesse is pressing all parties to wrap up discussions in time for the wireless industry’s trade show next week in Las Vegas, so Sprint can have something to present to investors. In addition to the $3 billion Sprint and Clearwire are trying to raise now to start rolling out WiMax, they will likely need more to complete a nationwide network.
Sprint previously had told Wall Street the venture would cost $5 billion by 2010.