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Clearwire approves Xohm merger

Companies now wait for the paperwork to clear before deal is finalized

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Clearwire shareholders in a special meeting today voted to approve the company’s merger with Sprint’s Xohm WiMAX business, creating a nationwide operator with the spectrum and funding to build a nationwide 4G network. Though the vote was the merger’s last major hurdle, the new company won’t come into existence just yet. The lawyers and the bankers now step in to finalize the deal, but Clearwire and Sprint expect to put ink to paper before the end of the year as planned.

The favorable vote came as little surprise, as Clearwire has been burning cash, expanding and operating its proprietary NextNet residential broadband wireless network for the last two years. Building the new WiMAX footprint depends on the infusion of $3.2 billion in capital, triggered when the deal finally closes. While Sprint has already launched in Baltimore, the first of what will be Clearwire’s new WiMAX markets, the two operators have either built or begun construction in six other markets: Washington, D.C.; Chicago; Atlanta; Las Vegas; Portland, Ore.; and Grand Rapids, Mich.

The companies have already selected the company’s new leadership, tapping current Clearwire CEO Ben Wolff to head up the venture, while Xohm President Barry West will become Clearwire president and chief network architect. Clearwire’s Perry Satterlee and Scott Richardson will likely remain chief operating and chief strategy officers, respectively, while Xohm senior vice president Atish Gude has been tapped as chief marketing officer.

What isn’t so clear is the direction the company will take after launch, particularly in branding. While Sprint initially maintained that the combined WiMAX service would take the name Xohm to take advantage of the branding and marketing Sprint has already put into the network, the name of the service is now up in the air, with management making the final brand decisions once the deal closes. It’s also unclear whether Sprint and Clearwire will immediately move to commercially launch their already-built WiMAX networks immediately.

Clearwire has been running live trials with friendly customers over a Motorola-built network in Portland, and Motorola has the largest single-market WiMAX network in the world—with over 600 base stations--up in Chicago waiting for the green light. Sprint and Clearwire have said they will take those two networks, as well as a Samsung-built Washington, live before the end of the year, but it may not actively market the service in those markets until next year.

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© 2014 Penton Media Inc.

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