LONDON (ShareCast) - Mobile communications company Sprint Nextel and Internet service provider CItywire have secured the backing of industry giants to form a joint venture company to provide mobile broadband access.

Sprint and Clearwire will combine their next-generation wireless broadband businesses in a new jointly-owned wireless communications company into which Clearwire will effectively be subsumed. The new company will retain the name Clearwire.

The joint-venture has the backing of Intel and Google plus cable networks Comcast, Time Warner and Bright House Networks. Between them the companies have agreed to invest $3.2bn in the new venture through the purchase of Clearwire’s common stock at a target price of $20, though this target price is subject to adjustment depending on the trading performance of the newly issued shares once they begin trading.

Upon completion of the proposed transaction Sprint will own around 51% of the new company, with existing Clearwire shareholders owning about 27%. The new investors will together hold about a 22% stake in the joint-venture.

By combining the next-generation wireless broadband spectrum portfolios of Sprint and Clearwire, and subsequently expanding it, the new company will be targeting a WiMAX network deployment serving between 120m and 140m people in the US by the end of 2010.

In addition to providing financial backing, Intel, Google, Comcast, Time Warner and Bright House Networks will also be engaging in commercial partnerships with the new company.

Intel will work with manufacturers to embed WiMAX chips into lap-tops that use its Centrino 2 processor, as well as other Intel-based mobile Internet devices, while Google will assist in the development of Internet services, advertising services and applications for mobile WiMAX devices. Google will also be the default search provider for the new Clearwire retail product.

Sprint, Comcast, Time Warner Cable and Bright House Networks will enter into wholesale arrangements with the new Clearwire to become 3G and 4G providers of the mobile WiMAX service.

Sprint had previously explored a partnership with Clearwire to work together on the creation of a WiMAX network, but the alliance was dissolved in November of last year.

WiMAX technology can be up to five times faster than today’s wireless standards and can serve entire cities.

• News Channel