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Sprint Deal Sets Up US Rollout Of WiMAX

In what looks like a major boost for power amplifier suppliers Anadigics and RF Micro Devices, WiMAX gets a $3.2bn shot in the arm as Clearwire targets half of the US population with broadband wireless.

GaAs power amplifier (PA) manufacturers Anadigics and RF Micro Devices look likely to be two of the major beneficiaries of a renewed effort to deploy WiMAX technology in the US.

Last week, Sprint and Clearwire breathed new life into a WiMAX strategy that had been thrown into disarray after their initial plans fell through last November (see related story).

Now, five major investors are backing a US rollout of networks and services to the tune of $3.2 billion.

Those investors include long-time WiMAX protagonist Intel, along with fellow big-hitters Google, Time Warner Cable, Comcast and Bright House Networks.

They will sink $3.2 billion into a "new" company, which retains the name Clearwire , with Intel investing $1 billion of that total through its Intel Capital investment unit in exchange for an approximate 7 per cent share in the business.

Tom Hausken, a market analyst at Strategies Unlimited, said of the announcement: "It can only be good news for the WiMAX development. Anything that moves it forward reduces uncertainty, which is good for the whole supply chain."

For Anadigics, whose role in the supply chain is to provide PAs, Intel s involvement looks like particularly good news because it is already a key customer of Anadigics PAs, which are used in the successful line of "Centrino" chip sets for Wi-Fi applications.

And according to Jefferies & Co investment analyst John Lau, who covers Intel, Anadigics and RFMD stocks, Anadigics is already shipping production orders of mobile WiMAX PAs to Samsung in support of the Sprint/Clearwire rollout.

Meanwhile, RFMD has Motorola on board as a significant customer for WiMAX through its "multi-market products group", much of which was acquired via last year s take-over of Sirenza Microdevices (see related stories).

Although WiMAX technologies are already being deployed around the world, the anticipated scope of the Clearwire project sets it apart, with the company targeting a network capable of serving between 120 million and 140 million people in the US by the end of 2010 - virtually half of the country's population.

Craig McGraw, the chairman of Clearwire, and the man viewed as the driving force behind the $3.2 billion deal, said, "We believe that the new Clearwire will operate one of the fastest and most capable broadband wireless networks ever conceived, giving us the opportunity to return the US to a leadership position in the global wireless industry."

New Clearwire CEO Benjamin Wolff described the development, which will operate on Sprint s pan-American 2.5 GHz spectrum, as a "once in a lifetime opportunity".

Although approved by all of the parties boards of directors, the complex transaction is not expected to be completed until the end of this year, meaning that some uncertainty and scepticism will inevitably remain in some quarters.

Hausken himself cautioned component suppliers to view the deal as "one data point".

"It s good news, [but] wireless is notorious for grand visions followed by heartbreak," said the analyst, who isn t changing any of his market forecasts just yet.

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