May 14 (Bloomberg) -- Craig McCaw, the billionaire mobile- phone pioneer whose last two projects failed, may prove Wall Street wrong this time.

McCaw, 58, helped resurrect a merger with Sprint Nextel Corp.'s high-speed data unit that could give his Clearwire Corp. the fastest national wireless Internet system in the U.S. Following last week's announcement, though, two analysts downgraded Clearwire, sending the shares lower by 12 percent. They cited the venture's unproven technology and the cost of competing against AT&T Inc. and Verizon Communications Inc.

Sellers may want to reconsider. Consumer spending on mobile Web services surged 55 percent to $24.5 billion last year in the U.S., according to Chetan Sharma Consulting in Issaquah, Washington. Apple Inc. sold 4 million iPhones in 2007, helping expand the market. That means McCaw may now be in step with the times, unlike his failure to sell Internet access via satellites.

``I'm not worried about the demand side,'' McCaw said in a telephone interview May 12. ``The key is that we'll be in the technological position to deliver the product we want.''

Clearwire rose 3 cents to $13.63 at 4 p.m. New York time in Nasdaq Stock Market trading. The stock has declined 21 percent in the last year.

McCaw will remain chairman of Clearwire, which he founded in 2003. Overland Park, Kansas-based Sprint, the third-largest U.S. mobile phone company, will own 51 percent of the combined company.

Investor Group

Clearwire, based in Kirkland, Washington, will get about $3 billion in cash from Intel Corp., the world's largest semiconductor maker; Google Inc., the world's leading Internet search service; and three cable providers. They are Philadelphia- based Comcast Corp., the largest in the U.S.; New York-based Time Warner Cable Inc., the second-biggest; and Bright House Networks LLC, the cable business of Syracuse, New York-based Advance/Newhouse Communication, ranked sixth.

McCaw said his key task will be to make sure his corporate stakeholders focus on common goals.

``The one challenge is you have a lot of people at the table,'' McCaw said. ``Part of my job, as I see it, is moral suasion to have people put aside their selfish interests for the common good and great that will come of it. If there will be one measure as to whether I've succeeded or and failed in my time as chairman on this thing, it is: Did I administer regular beatings on people to put their selfish interests aside?''

Reaching Customers

Clearwire uses WiMax technology to provide Internet service in 46 U.S. markets such as Boise, Idaho, and Rochester, New York. WiMax can blanket a few square kilometers with wireless Web access, compared with the coverage offered by Wi-Fi networks for sites such as airport terminals and coffee shops. The company had 392,000 U.S. subscribers as of March 31.

Whether WiMax can reliably cover larger markets is unknown, said analyst Steve Clement at Pacific Crest Securities in Portland, Oregon.

``It's going to take a long time to prove this thing out,'' Clement said. He downgraded Clearwire to ``sector perform'' on May 8.

Michael Rollins, an analyst at Citigroup Inc. in New York, recommended last week that investors sell Clearwire shares. He said the planned network's coverage would reach less than half the U.S. population by 2010.

McCaw's career includes two flops. His local-phone company XO Communications Inc. filed for bankruptcy in 2002, the same year he shuttered Teledesic LLC, which planned to use satellites to offer Internet and phone service. The technology was too expensive, Teledesic said at the time.

`Core Competency'

``A lot of people bet against McCaw the first time around and the second time around, and some are betting against him the third time around,'' said Benjamin Wolff, 39, Clearwire's chief executive officer. ``This space is McCaw's core competency. This is wireless terrestrial communications.''

Wolff disputed Citigroup analyst Rollins's figures, saying they didn't account for growth in large cities, and said he's confident in Clearwire's WiMax technology.

McCaw founded McCaw Cellular Communications Inc. in 1981 and sold it to AT&T for $11.5 billion in 1994. In his latest transaction, McCaw is combining Clearwire's assets with those of Sprint. A previous agreement between the two companies fell apart in November after Sprint's board ousted Chief Executive Officer Gary Forsee.

Seizing Opportunities

``He recognizes that there's opportunity where others are risk-averse or too slow,'' said Tom Alberg, a former vice president of McCaw Cellular who is now managing director of Madrona Venture Group LLC, a Seattle investment firm.

Sprint dropped a plan to build its own WiMax system after 1.2 million mobile-phone customers dropped their contracts last year.

Santa Clara, California-based Intel, the world's largest semiconductor manufacturer, has pledged $1 billion for the combined company. Intel, Clearwire's largest shareholder with a 19.7 percent stake, also makes chips for laptops and other devices that can run on WiMax networks.

Google, based in Mountain View, California, will offer Web searches, e-mail and other services to Clearwire's WiMax subscribers. Google is a ``kindred spirit,'' McCaw said.

``The Google spirit is: `What should be, can be.' And that's how we think,'' McCaw said.

To contact the reporter on this story: Crayton Harrison in Dallas at tharrison5@bloomberg.net.

Last Updated: May 14, 2008 16:20 EDT