Sprint, Cable Companies in For Wireless
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Can cable companies use wireless to stem the advances of telephone competitors? Four of them will try, as they launch seven pilot programs to test subscriber interest in wireless services.
The companies are fighting the encroachment of telcos on traditional territory by adding wireless service to their existing voice, video, broadband Internet triple-plays.
In November, Time Warner, Comcast, Cox Communications and Advance/Newhouse Communications announced the joint venture with Sprint Nextel. The agreement, which will begin regional tests of a wireless service later this year, has a 20-year lifespan with both the wireless company and the cable firms investing $100 million each.
Initially, the service will provide cable subscribers access to TV and e-mail, according to the companies.
Time Warner will begin its pilots in Austin, Texas, and Raleigh, N.C, and Comcast plans to test the service an unspecified New England city. Cox and Advance/Newhouse refused to identify the first locations to test the quadruple-play service.
The service, which includes e-mail and television schedules available from Sprint Nextel cell phones, will be branded to fit individual cable companies, and the name will meet the venture's vision of "convergence," said Aimee Metrick, a Sprint Nextel spokesperson.
Metrick said the length of the pilots is unknown. Sprint refused to comment on whether it will offer subscribers of other wireless providers discounts to try the new quadruple-play service.
Such discounts are needed if the cable industry hopes to lure wireless subscribers tethered to Verizon, AT&T, Cingular or T-Mobile by high-termination fees and attractive calling plans, according to analysts.
Wireless is "the only piece that cable companies don't have," said Amanda Sabi, a principal Gartner analyst. While Verizon, AT&T and other telcos are slowly testing or delivering video via fiber, cable has a momentary lead in providing TV services to subscribers.
However, bundled discounts will be needed to shake loose wireless subscribers. Once wireless consumers are satisfied with their service, without better pricing, it is difficult for them to switch, said Sabi.