Cable, Sprint up ante on rivals

March 26, 2008

cellphone-guy.jpgTwo sectors may be getting a new lease on life after the Wall Street Journal reported news that a handful of the top U.S. cable operators are exploring a joint venture with Sprint Nextel and Clearwire to create a national high-speed wireless network to fight off the telcos for subscribers.

Without a big infusion of cash, WiMax technology could be a non-starter in the U.S. So far, Sprint has planned to introduce the service in three markets.

Expanding beyond that may prove a tough sell for Sprint shareholders who had widely criticized its commitment last year to spend $5 billion on WiMax by 2010. Sprint is also struggling to keep its existing customers from leaving.

But with an estimated $3 billion in potential investment from Comcast, Time Warner Cable, Bright House Networks, Google and Intel, Sprint and Clearwire are poised to make life uncomfortable for AT&T, Verizon, DirecTV and EchoStar.

The cable industry has also dabbled in offering wireless services over the past few years, notably with Sprint. But with wireless penetration in the United States at over 80 percent, coming to market with a me-too offering won’t cut it anymore.

Is this the dawn of a new broadband arms race?


Keep an eye on:

  • Banks to Clear Channel: No way. (Reuters)
  • Motorola to spin off handset division. (Reuters)
  • Take-Two to Electronic Arts: Still NO. (Reuters)
  • Fewer reporters on the U.S. presidential campaign trail? Blame the blood-letting in the newspaper industry. (NYT)

(Photo: Reuters)

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