Archive for Thursday, December 30, 2004

Time Warner seeks ‘quadruple play’

Cable company, Sprint discuss potential pact for wireless services

December 30, 2004


Sprint Corp. and Time Warner Cable are discussing a deal that would allow the cable provider to offer cell phone service, the companies said Wednesday.

Such a deal would make the unit of Time Warner Inc. the only major cable company to offer the so-called "quadruple play" -- television, high-speed Internet access and both wired and wireless phone service.

It also would be the latest in a series of partnerships for Sprint in which other companies introduce their own brand of cell service using Sprint's network. These include deals with AT&T; Corp., the ESPN unit of Walt Disney Co., Virgin Mobile USA LLC, and Qwest Communications International Inc.

While representatives of both companies confirmed that talks were under way, they wouldn't say if a deal was imminent, as was reported Wednesday by The Wall Street Journal. The paper said the new service would be limited to the Kansas City-area market and become available in the first quarter of 2005.

Sprint and Time Warner, the nation's second-largest cable company with 11 million subscribers, announced a partnership a year ago that allowed Time Warner to offer standard phone service over Sprint's landline network using Internet technology. Time Warner also is working with MCI Corp. on Internet telephone service and has signed up 200,000 voice customers in its 31 markets, Time Warner spokesman Keith Cocozza said.

Since then, Sprint has announced a number of similar deals with other cable companies, such as Mediacom Communications Inc. and USA Companies.

Earlier this year, Lawrence-based Sunflower Broadband secured a deal to resell Sprint's wireless service. Sunflower -- a division of The World Company, which owns the Journal-World -- already offers cable television, high-speed Internet and wireline phone service on its own network.

"Sunflower Broadband, to my knowledge, is the only cable operator with an agreement in place to resell Sprint services," said Patrick Knorr, Sunflower's general manager and director of strategic planning for The World Company. "Time Warner would be the second."

As Sunflower continues working to establish its own "quadruple play" of offerings, Knorr said, Time Warner's efforts could help speed the process.

"Ultimately, what we'd like to be able to do with Sprint is completely integrate a cellular service into our package, so customers can receive one bill and have one point of contact," Knorr said. "We've had discussions to broaden our partnership. We think this is a good thing for the cable industry and for Sprint, and as an independent operator that it's a great potential relationship."

Sprint spokesman Jeff Shafer said that the Overland Park-based company was in talks with all of its cable partners to eventually resell Sprint wireless service as part of a package deals to subscribers.

"Our relationship with the cable companies is as much about offering the quadruple play as it is offering (Internet phone service)," Shafer said. "This is all about offering a compelling bundle to the consumer."

Cable companies are in a bitter fight with traditional phone carriers, such as SBC Communications Inc., BellSouth Corp. and Verizon Communications Inc., as both are trying to offer the full range of television programming, high-speed Internet, standard voice services and wireless.

The strategy is based on the assumption a customer receiving a wide range of services from a single company is less likely to jump ship to another provider.

Avi Greengart, principal mobile device analyst for Current Analysis of Sterling, Va., said some customers never would buy bundles, preferring satellite service to cable or seeking to avoid certain telephone providers.

"Whether there's a single bundle that fits all is debatable, but a bundle for customers who will pick those services up? That's compelling," Greengart said. "If you bundle services, that reduces churn."

A consortium of cable companies, including Time Warner, are studying how to break into the wireless business, either by building their own network, buying up a wireless provider or teaming up with a company like Sprint to resell the service.

Sprint is the nation's third-largest cellular provider with about 23 million subscribers. Earlier this month, Sprint and Nextel Communications Inc. said they would combine in a $35 billion deal that would create a company with 38 million wireless subscribers.

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