Sprint and Clearwire to reveal joint venture

By Yinka Adegoke

NEW YORK (Reuters) - Sprint Nextel (S.N) and Clearwire (CLWR.O) are near announcing a $12 billion (6.02 billion pound) joint venture with major cable operators to offer services based on WiMax, an emerging technology that could make wireless Internet ubiquitous, people close to the talks said on Tuesday.

WiMax is expected to blanket entire cities with Web access for mobile devices at speeds up to five times faster than traditional wireless networks, but it is a largely unproven technology.

Shares in regular and afterhours trading rose a total 10 percent for Sprint and as much as 23 percent for Clearwire, after sources said the long-awaited deal may be announced as soon as Wednesday morning or afternoon after market close.

"The deal is essentially done in principle," said one source.

Sprint and Clearwire, which both have said they were looking for outside funding for their WiMax plans, will each contribute airwaves and network equipment that they have allocated for a network that they plan to build based on WiMax.

The top two U.S. cable operators Comcast (CMCSA.O) and Time Warner Cable (TWC.N) will invest $1.5 billion between them, according to people familiar with the discussions.

Comcast will contribute $1.05 billion, while Time Warner Cable will invest $550 million. Both are looking to compete better with rivals such as AT&T (T.N) and Verizon Wireless.

In addition, Intel (INTC.O) is expected to contribute $1 billion, and Google (GOOG.O) $500 million. Bright House Networks, the sixth-largest U.S. cable provider, has also been involved in the discussions, according to the sources, and will contribute $100 million.