Sprint, Cable Powers to Offer Cell Services
NEW YORK — Four 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.
The 20-year arrangement sets the stage for big battles with phone giants that are preparing to add video programming to their own rapidly growing complement of products.
Wednesday’s 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 also will contribute $100 million to the initiative. The funds will be used to develop a technology platform that can deliver integrated cellular and cable services.
The alliance, which took a year to negotiate, could soon be expanded to include other cable companies. The companies said talks are already underway with Charter Communications Inc. and Mediacom Communications Corp. as well as smaller providers in more rural markets
The 5 million cable subscribers served by Adelphia Communications Corp. are slated to become customers of Time Warner and Comcast after scandal-marred Adelphia emerges from bankruptcy, expanding the potential audience served by the initial partners to 46 million.
The deal envisions a launch by mid-2006 of cell phones with advanced capabilities such as wireless access to live cable channels and programs stored on digital video recorders at home, as well as the ability to program a DVR remotely. The mobile phones would also feature single-screen access to e-mail and voice mail from a customer’s home and wireless numbers.
“It’s truly marrying the fixed line and the wireless for voice and video,” said Weston Henderek in San Diego, an analyst for the Current Analysis Inc. research firm in Sterling, Va.
Though a joint venture, no new company will be formed. Instead, an undetermined number of executives from each company will form a governance council to guide managers and determine how to spend the $200 million. Engineers from each company will work collaboratively to solve the technical challenges.
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, determined by an individual agreement between Sprint Nextel and that particular cable company.
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.