Goodbye AT&T, Cingular, and Comcast; Hello Clearwire… and Google?
Reuters reported today that Intel Corp.’s venture capital arm (invested $600 million) and Motorola Ventures, the venture capital unit of Motorola Inc., are participating in a financing round totaling $900 million for Clearwire Corp., a wireless Internet provider founded by telecommunications pioneer Craig McCaw. This is in additon to the announcement in May, where Clearwire said it planned to raise up to $400 million in an initial public offering of its class A common stock.
Doing some quick math, that’s a cool $1.3 Billion for a wireless company you’ve never heard of. This is not $1.3 Billion of market capitalization; it is $1.3 Billion of “venture investment.”
Intel of Santa Clara, California, and Motorola of Schaumburg, Illinois, said the moves were part of an effort to expand the availability of high-speed, wireless Internet access known as WiMAX. WiMAX is sometimes described as the bigger brother of WiFi technology, which allows laptop users to link to the Web from “hot spots” in cafes, airports and hotels. It is also seen as a potential spoiler for cable modems and other, older Internet connections.
Intel is going through a bit or turmoil these days, selling off less profitable operations, so one has to wonder why they would sink $600M in a company putting up WiMAX towers around the country. Why not invest in a few WiMAX startups to help promote WiMAX?
Motorola is also going through some turmoil, especially in their infrastructure groups. Why buy Clearwire’s subsidiary, NextNet Wireless, a maker of wireless broadband infrastructure equipment, for an undisclosed amount? They certainly have enough engineers working on WiMAX already.
Things happen every day, and most things pass unnoticed, but not this one. It just doesn’t pass the smell test. It’s too much money from some big names at the wrong time. We think something is afoot, and it has to be big. Google big.
The last mile to the consumer is the battleground, and the final battle has just begun. If someone (Google) was to have lots of dark fiber available (Google) and enough cash (Google) to help finance it, we could all just see the internet arrive at our doorstep via a WiMAX solution. If this rollout could be coordinated with location based advertising (Google) it could even arrive at little to no cost to the consumer. If it is fast enough, it could provide phone, television, as well as internet services. Everything in one nice little package. Intel provides the chips, Motorola the equipment, and Google everything else.
It’s probably technoparanoia on our part, and we’re sure there is nothing to it. If our delusions continued we’d next imagine a VOIP WiMAX cellphone that runs on the same network (Motorola phone, Intel chipset)… imagine that. It would be time to say goodbye to some old friends.
Goodbye AT&T, Comcast, Verizon, Cingular, TMobile, Cox, Sprint, et al… Something new is likely on the way, and things will change again.
