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News Corp and Clearwire ready to tie the knot?

Quad play marriage could rival Sprint and cable cos

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As the four major cablecos involved in a quadruple play joint venture with Sprint get ready to launch initial services, they may face another rival apart from the incumbent telcos, themselves moving towards quad play with a combination of fiber-to-the-home, IPTV, and their cellular arms.

This will come from the satellite broadcast sector - News Corp's DirecTV, with or without rival Echostar. Its most likely partner to deliver the broadband and return play aspects of the network, the glaring hole in satellite's system, is Clearwire, since the other holder of US national broadband wireless spectrum, Sprint, is already spoken for, and the other 3G players are telco-controlled.

A deal between News Corp and Clearwire, long rumoured, looks increasingly probable as the former's chairman, Rupert Murdoch, drops heavy hints of near term broadband wireless activities and initial investments up to $1bn.

News of such a partnership could steal a little thunder from the imminent announcement of Sprint Nextel's choice of supplier for its own broadband wireless build-out in 2.5GHz, the most closely watched award of the year because of its critical importance to the future fortunes of all four main bidders (Motorola, Qualcomm, Samsung and IPWireless).

Of these, Motorola has a lot to lose, since Nextel is its largest customer with the legacy IDEN network, but can also win on more fronts because of its rapidly developing business in integrated quad play equipment, which draws together its handsets, networks and set-top boxes, using multiple protocols if necessary.

This could make Motorola a key supplier to the Cableco-Sprint combination even if it does not get the infrastructure deal, as well as an almost certain vendor to a DirecTV-Clearwire alliance, since it has already taken a stake in the latter and Motorola was one of the earliest majors clearly to state the case for broadband wireless as a quad play platform, and to stake a significant part of its growth strategy on the convergence of various broadband technologies to deliver ubiquitous access and content.

The coming months will be critical in deciding how far the company can cash in on its vision in its native market, with all the key operators behind the US shift to convergence poised to make major partnership decisions.

Motorola has already paid $300m to buy a stake in operator Clearwire and ensure that company's national roll-out is WiMAX-based, and that investment could yield significant dividends should current talks between Clearwire and News Corporation's US satellite TV arm DirecTV bear fruit.

In addition, breath remains bated at Motorola in anticipation of Sprint Nextel's decision about which equipment to use in its hefty swathe of 2.5GHz spectrum, with Motorola WiMAX being one of the options.

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