reseller channel: Cablecos Sprint to Quad-Play

By Tara Seals

Four of the nations top cable providers are teaming with Sprint Corp. to deliver a suite of converged services that include live television on wireless phones, combined wireline/wireless mailboxes and more.

Advance/Newhouse Communications Inc., Comcast Corp., Time Warner Inc.s cable division and Cox Communications Inc. will resell wireless service from Sprint. Also, they will partner with the phone company to develop a shared technology platform to deliver an integrated quadruple play of voice, video, Internet and wireless the MSOs will invest a combined $100 million in development, with Sprint contributing an additional $100 million.

Each cable company also has its own direct relationship with Sprint and will determine the right quad-bundles for its markets. The wireless phones will be cobranded (i.e., Sprint phone powered by Comcast); the MSOs will provide customer service for cell subscribers within its territory and bundle the charges for wireless on a single bill.

As for customer ownership, we are equal partners in this, says Sprint CEO Gary Forsee. Each of us will retain full retail ownership for our portions of the bundle, while jointly developing and delivering advanced services.

The cablecos stress that the deal aims to create real service integration, not just expanded marketing bundles. The first half of 2006 will see converged offerings such as the ability to program a digital video recorder via cell phone, a single voice mail for home and wireless phones, calling plans allowing unlimited landline and mobile usage, and streaming TV and music on special mobile handsets.

The move is mutually beneficial. It enables cablecos to fend off competition from the nations two largest telephone companies, SBC Communications Inc. and Verizon Communications Inc., who are spending billions to upgrade to fiber for the purpose of delivering high-bandwidth applications such as IPTV. Verizon launched its first television service in October, in the Dallas suburb of Keller. Meanwhile, SBC plans to roll out video in 2006. We [cablecos] had planned to team up together a year ago to gain a competitive advantage over Bells and satellite by integrating wireless and wireline into one integrated offering, says Glenn Britt, chairman and CEO of Time Warner Cable. We will have different offerings in each territory, but the technological platform will be the same.

Secondly, the deal strengthens an Achilles Heel for Sprint: The company gains a lastmile solution via the cable plant for delivery of wireline services and will expand its wireless content portfolio through the cablecos enviable stable of media. The longterm plan is to seamlessly integrate cable and wireless offers, in and out of the house.

This [first round of services] is a baby step compared to what is to come, says Jim Robbins, president and CEO of Cox Communications. For instance, he cites caller ID and other IP-enabled services over TV as well as VoIP-enabled interconnection of cable service with wireless. Sprints agreement with the cable companies is expected to include eventually seamless handoffs between cellular and Wi-Fi networks. Also, the cablecos say they will take CableLabs standards to handset vendors to develop set-top boxes and handsets to deliver network-agnostic services.

For now, other top MSOs, Cablevision Systems Corp., Charter Communications Inc. and Mediacom Communications Corp., have been invited to join the partnership, and we are talking to smaller companies as well, says Britt. Eventually, we hope to have a national quilt of these services.

The wireless service will be distributed through 1,600 Sprint retail stores, cable retail outlets and thousands of RadioShack stores.