Sprint Nextel Corp. and four large cable television providers will move beyond the Holy Grail of integrated telecommunications offerings — the so-called triple play of voice, data and video — with a joint venture aimed at adding wireless service to the mix.
The joint venture, announced Wednesday, aims to integrate Sprint Nextel’s wireless service with voice, data and video services offered by the cable giants for a quadruple play by 2006. The five companies — including Comcast Corp., Time Warner Cable, Cox Communications Inc. and Advance/Newhouse Communications Inc. — plan to offer cobranded wireless devices that integrate cable TV programming, also by 2006.
One of the goals of the collaboration is to provide live cable broadcasts over handheld mobile devices, said James Fisher, a Sprint Nextel spokesman. “It takes the customer experience to a whole new level,” Fisher said of the joint venture.
Sprint Nextel will invest US$100 million into the joint venture, and the four cable providers will jointly contribute another $100 million. The joint agreement runs for 20 years and is mutually exclusive for three years.
The announcement comes after Apple Computer Inc. last month launched downloads for a new video-capable version of its iPod device. At the same time, large telecommunications carriers are beginning to offer video over IP (Internet Protocol) service in competition with the cable providers, with Verizon Communications Inc. launching its fiber-optic video service in Keller, Texas, in September, and SBC Communications Inc. receiving approval this week from the Public Utility Commission of Texas to launch its own video service in the San Antonio, Texas, area.
But the joint agreement between Sprint Nextel and the cable providers was in the works before the recent announcements from competitors, with the cable providers talking about such a project for about a year, said a Comcast spokeswoman. The joint venture will offer a “far better experience” than triple-play services currently offered by competitors, she said.
The companies envision several services, including customers being able to program their digital video recorders from a Web site or a mobile phone, the spokeswoman said. The companies will use Sprint Nextel’s EV-DO (evolution data optimized) broadband wireless service to offer cable services over so-called next-generation wireless phones..
Customers will be able to pay for the quadruple play of services on one bill, the spokeswoman added.
Jeff Kagan, an independent telecom analyst, in an e-mail commentary called the announcement “a home run” for Sprint Nextel, which will have coast-to-coast access to cable television programming over wireless devices.
“This is the blurring of television and telephones,” he added. “The potential is great, and it changes the way we think about these services, combining them, rather than using separate products on separate networks.”
The agreement is also important for the cable providers in their efforts to compete with large telecom carriers, Kagan added. “We are seeing a new war brewing between the cable TV and telephone companies,” he said.
“Yesterday customers used both, but tomorrow they will be able to choose one or the other for everything, telephone, television, high-speed internet and wireless service.”