DirecTV, EchoStar Partner with Clearwire

Satellite TV providers DirecTV and EchoStar are taking on cable, partnering Clearwire to combine satellite television with high-speed Internet service.

Satellite television operators DirecTV and EchoStar are ratcheting up their competition with cable behemoths like Time Warner and Comcast by partnering with Clearwire to offer high-speed wireless Internet connectivity with satellite television. The deal also allows Clearwire to offer DirecTV and/or EchoStar satellite TV service to its Internet customers. Financial terms of the deal were not disclosed; service offerings should become available later this year.

“We’re pleased to partner with these two satellite companies as they both share our commitment to offering a superior customer experience by enabling customers to enjoy the benefits of unwired services,” said Perry Satterlee, Clearwire’s president and COO. “By expanding the reach of our services through DirecTV and EchoStar, and by incorporating direct-to-home satellite video services in our own distribution channels, we believe we have an opportunity to significantly expand our business opportunity.”

Where cable operators and phone companies have been able to make compelling consumer bundles by offering to combine telephone, television, and Internet service into one convenient package, satellite operators have always been at a disadvantage due to the inherent latency involved in their technology and the fact they don’t have wires (or fiber) running into people’s homes. The agreement with Clearwire enables the satellite TV operators to bundle high speed Internet access with satellite television service, or offer Clearwire service on a standalone basis.

Clearwire was launched by cell phone pioneer Craig McCaw, and uses a WiMax-like technology to offer wireless broadband Internet access in about 40 U.S. metropolitan markets. The company currently has over 250,000 subscribers.

The deal could be a major shot in the arm for Clearwire: DirecTV is the largest satellite TV operator in the U.S., with an estimated 16 million subscribers, while EchoStar boasts over 13 million subscribers. If even a small fraction of those users take advantage of Clearwire service bundlings, Clearwire could see its user base soar. And the satellite TV operators are not the only major players looking at Clearwire: according to the Wall Street Journal mobile operator Sprint Nextel is considering a partnership with Clearwire to bolster its wireless capabilities.