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The new company, which will retain Clearwire's name, will deploy a nationwide WiMax network, which promises faster speeds than the latest cellular networks for movies, games and other data services.

WiMax promises to blanket entire cities with Web access for laptops, cell phones and other wireless devices at fast speeds. It uses a licensed channel of radio spectrum and can transmit, according to its backers, to an area as much as 50 kilometers (30 miles) with a stronger signal than Wi-Fi and access faster than most current devices. It aims to have a service area covering as many as 140 million people in the United States by the end of 2010.

Sprint, which would otherwise have had to invest $5 billion on a solo WiMax network, will now inject WiMax assets valued at $7.4 billion into the venture, giving it 51 percent ownership.

"The power of the mobile Internet, which offers speed and mobility, home and away, on any device or screen, will fundamentally transform the communications landscape in our country," said Clearwire chairman Craig McCaw, who would become non-executive chairman of the firm to be based in Washington state.

"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."

Rivals such as AT&T and Verizon Wireless have eschewed WiMax, opting instead for upgrades to their current wireless broadband networks and a future technology called Long Term Evolution. WiMax is available now and should give the new company a two-year head start in the so-called "fourth-generation," or 4G, telecommunications market.

Clearwire will sell WiMax services back to Sprint and the cable partners, through a "mobile virtual network operator," or MVNO, business model. There are no plans, however, to offer similar access to service providers not part of the joint venture.

The new Clearwire will cover a region with between 120 million and 140 million people in the US by the end of 2010. Upon completion of the deal, Sprint will own the largest stake in the new company with some 51 percent equity ownership. Clearwire shareholders will own around 27 percent and the new investors, as a group, will be acquiring an estimated 22 percent.

The deal, which has been approved by the boards of all companies involved, must be approved by Clearwire shareholders and regulatory agencies, but is expected to close during the fourth quarter. The company will apply for a Nasdaq listing under the ticker "CLWR" - the current symbol for Clearwire.