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Cable Providers, Sprint Will Offer Wireless Video, Phone Services

Posted on: Thursday, 3 November 2005, 12:00 CST

By Keith Reed, The Boston Globe

Nov. 3--Comcast Corp. and other major cable providers revealed plans yesterday for a $200 million venture with Sprint Nextel to develop technologies that would allow consumers to program and receive home entertainment and other information services with their cellphones.

The deal hinges on Comcast and cable companies Time Warner Cable, Cox Communications and Bright House Networks adding Sprint's cellular service to their existing "bundles" of phone, Internet, and video.

The companies will also jointly develop new phones that allow customers to access cable TV and other video content. Consumers could, for instance, remotely instruct their cable boxes to record a program, watch CNN or MTV live while on the subway, or access both home and cellphone voicemail using a single number, all via their wireless phones.

Beyond that, the deal is more evidence of the convergence of communications technologies and emergence of high-quality digital services promised by the 1996 deregulation of the telecommunications industry. Telephone giant Verizon Communications Inc. has its own cable TV service; cable companies sell phone service; cellular companies let subscribers listen to music on their phones.

The pact between Sprint and the cable companies "is bigger than the ordinary deal," said Jeff Kagan, an Atlanta-based independent telecommunications analyst. "We've been talking about it for the last 10 years, and now it's here."

Cable companies, including New England's dominant player, Comcast, have been offering home phone and Internet service for at least five years, while the wireless industry has acknowledged that its growth now depends on delivering entertainment rather than selling buckets of talk time. Earlier this week, Sprint Nextel unveiled a new music service in which consumers can download entire songs to their cellphones for $2.50 apiece.

Yesterday's disclosure is another step in that direction, as well as a strike by the cable companies and Sprint Nextel against dominant local carriers such as Verizon and SBC Communications Inc.

In an era when providing all of a consumer's entertainment and communications services is key to companies' survival, the alliance gives the cable and wireless companies an opportunity to eliminate one of the Baby Bells' last advantages.

"The telcos have been facing some decline in their industry, and they have been relying on the fact that they could offer wireless, and the cable companies couldn't," said Kate Griffin, a consumer technology analyst with the Yankee Group, a Boston consulting firm.

Sprint's deal with the cable companies will immediately mean cable operators can start selling wireless phone service as part of their service bundles.

In New England, Comcast already sells cable, telephone, and high-speed Internet service as a package, though customers can choose to buy those services individually.

More important, the deal calls for the five companies to jointly develop ways for customers to access their home entertainment through their cellphones.

By early next year, the companies plan to offer phones that will allow consumers to program digital video recorders, access multiple voicemail accounts, and view programming from cable boxes or DVRs, said Sprint chief executive Gary Forsee.

In a conference call yesterday, executives of the five said pricing for cable-wireless bundles hasn't yet been worked out.

The cable companies would be responsible for billing, and subscribers could pay for their cable, Internet, phone, and wireless bills with one check.

How the bundles are initially priced will be a key factor in their popularity with consumers, Kagan said.

"We have to wait and see how many people use it, what they charge for it. When it's new, people try it. After that period, the question will be, how many people drop out," he said.

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S, CMCSK, TWX, COX, VZ, SBC,

Source: The Boston Globe

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