News

Intel partners with cellular pioneer’s firm on WiMAX

• By John K. Waters
• October 27, 2004

Intel Corporation pushed its WiMAX strategy another step forward this week with the announcement of a partnership deal with Clearwire, Inc. a wireless broadband services company founded by cellular pioneer Craig McCaw.

WiMAX (also known as IEEE 802.116a) is an emerging wireless standard designed to connect Wi-Fi hotspots to the Internet and provide a wireless alternative for last-mile broadband connectivity to businesses and homes. Unlike Wi-Fi, which provides only a few hundred square feet of coverage, WiMax networks extend over several square miles.

The deal calls for Clearwire to roll out new networks that use the latest WiMAX version, the upcoming IEEE 802.16e. Neither company provided financial details of the agreement, except to say that Intel will invest a "significant" share of its $150 million Intel Capital fund in Clearwire. That investment will support the development of next-generation Intel chips for devices made by Clearwire's NextNet Wireless subsidiary.

Sean Maloney, executive vice president of the Intel Communications Group, and McCaw made the announcement at this week's CTIA Wireless IT & Entertainment conference in San Francisco. "We are [heading] toward merging into that standard where lots of devices are produced," Maloney said during a post-keynote press conference at the show. "The difference between WiMAX and Wi-Fi is that the WiMAX community so far has been a healthy ecosystem."

Intel believes that the wireless service provider and telecommunication equipment industries are “rallying around” WiMAX because it provides cheaper last-mile connectivity than digital subscriber lines and cable broadband. That lower cost means that WiMAX can serve rural areas and developing nations, where laying fiber is an expensive proposition.

Recent research indicates that WiMAX will be a hot technology over the next several years. Parks Associates, a research and consulting firm based in Dallas, predicted earlier this year that there will be more than 7 million WiMAX subscribers worldwide by the end of 2009.

Gerry Purdy, an analyst with MobileTrax, who attended the Intel-Clearwire press conference, saw the partnership as a deal that could help ramp up significant industry adoption of WiMAX technology. "It was one of the more important deals at this conference," Purdy said. "You don't make an investment in Craig McCaw as a side deal -- it's something that is meant to have major long-term implications."

In January, Intel announced its intention to "work with the industry" to drive down the cost and increase the availability of both 802.11-based wireless local area networks (WLANs) and WiMAX-based wireless metropolitan area networks (WMANs).

McCaw, who founded and then sold McCaw Cellular to AT&T Corp. for $11.5 billion in 1994, launched his Kirkland, Wash.-based startup earlier this year. Clearwire is currently deploying fixed-wireless broadband similar to WiMAX in Mexico, Canada, and Jacksonville, Fla.. He said he expects his company to deliver service to Abilene, Texas, and St. Cloud, Minn., next month, and 20 other U.S. markets in the next year.

"We have been talking for nine months [with Intel] and trying to mold thinking on WiMax to make sure we avoid the pitfalls that we have seen in precursors' technologies," he told reporters, "both in the cellular world and other parts of the world."