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Cable Companies Team With Sprint Nextel

Posted on: Wednesday, 2 November 2005, 12:00 CST

By BRUCE MEYERSON

NEW YORK - Four of the nation's top cable TV providers announced a long-awaited deal to deliver their own cell phone services through Sprint Nextel Corp., creating a "quadruple play" of voice, video, Internet and wireless products for a new battle against telephone companies that are adding TV to their arsenals.

The agreement Wednesday calls for Comcast Corp.; the cable division of Time Warner Inc.; Cox Communications Inc. and Advance/Newhouse Communications Inc. to invest a combined $100 million in the new joint venture with Sprint Nextel, which will also contribute $100 million to the initiative.

The deal, rumored for nearly a year, envisions a launch of cell phones and services at an undetermined point next year. The products will be co-branded by Sprint and the cable company serving the market where the customer resides.

Prices for the cellular services will vary by market through an individual agreement between Sprint Nextel and the cable company serving that territory - a sign of the likely difficulties encountered in reaching an agreement among so many players with divergent interests even within a single company's operations.

Each cable company will provide customer service for cell subscribers within its territory and bundle the charges for wireless on a single bill - considered a key selling point for consumers.

The alliance also envisions an array of converged products melding phone, cable, Internet and wireless services, though the companies did not indicate when they might arrive.

Examples of these converged offerings included the ability to program a digital video recorder via cell phone, a single voicemail for home and wireless phones, calling plans allowing unlimited landline and mobile usage, and streaming TV and music on a cellular handset. Many of these services would be enabled by the speedier wireless Internet technology Sprint Nextel is in the process of rolling out across the country on the Sprint cellular network.

The move into wireless by the cable companies follows a major push into residential phone service, another effort to protect their turf from a coming invasion into cable TV by the nation's two largest telephone companies, Verizon Communications Inc. and SBC Communications Inc.

Verizon and SBC are spending billions to upgrade their copper networks with fiber-optic cables. Last month, Verizon launched its first television service in the Dallas suburb of Keller. SBC plans to begin rolling out video next year.

News of the deal appeared to boost the stocks of the publicly traded companies involved. Time Warner rose 33 cents, or 1.9 percent, to $17.90 in midday trading on the New York Stock Exchange. Sprint Nextel rose 89 cents, or 3.7 percent, to $24.74 on the NYSE. Comcast's Class A shares rose 72 cents, or 2.6 percent, to $28.71 on the Nasdaq Stock Market. Cox and Advance/Newhouse are privately held.

Source: Associated Press/AP Online

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