Intel Corp. says it is investing $600 million in Clearwire Corp., as part of a $900 million investment that could help spur adoption of a wireless technology called WiMAX.
The other company that is going to join the project is Motorola Inc.. It will contribute an unspecified portion of the extra $300 million going to Clearwire and will pay an additional undisclosed sum to buy Clearwire’s hardware business.
Clearwire sells wireless Internet access in 26 metropolitan markets in the U.S., Ireland, Belgium, Denmark and Mexico. The company’s service is based on a precursor to WiMAX but has been expected to convert to the newer technology.
WiMAX is a longer-range cousin of Wi-Fi, the wireless technology that now comes with many laptop computers. It is expected to deliver service at ranges of one to 10 miles (compared with around 150 feet for Wi-Fi) and is being developed for both stationary and mobile Internet access.
Unlike Wi-Fi, WiMAX is expected to be used with licensed radio frequencies. The Wall Street Journal reported taht Clearwire is believed to be the second-largest U.S. holder of frequencies that are suitable for WiMAX, behind Sprint Nextel Corp.
Intel said it hopes the $600 million investment by its venture-capital arm, the largest in that unit’s history, will allow the deployment of WiMAX-based networks faster.
The investment by Intel comes as the processor producer is unwinding a series of communications investments it undertook during the Internet bubble. Those deals were designed to help diversify Intel from its reliance on selling chips that act as the brains for personal computers and server systems.
The operation however is a risky business for Intel since in 2005 Clearwire had a net loss of $140 million on revenue of $33 million, most of which came from the sale of equipment. The company had just over 62,000 subscribers last year, though its service was available to nearly 4.8 million households.