New York -- The concept of “television on the go” got a big boost Wednesday when executives at four cable companies announced a deal with Sprint Nextel Corp. that would allow cable subscribers to buy a quadruple-play bundle of voice, video, high-speed-Internet and wireless-telephony service.
Comcast Corp., Time Warner Cable, Cox Communications Inc. and Advance-Newhouse Communications announced an agreement with Sprint Nextel Wednesday that not only will allow cable subscribers to buy a co-branded wireless service, but later will let them program digital-video recorders and view programming via wireless handsets.
Any wireless-video offering would only be available via Sprint Nextel’s high-speed-Internet offering, “PowerVision,” currently available in only about 75 markets. It is expected that once the service is rolled out, that footprint will expand.
The 20-year deal -- exclusive for three years -- will require the cable operators to pony up about $100 million (another $100 million will be provided by Sprint Nextel) to fund the development of services such as integrated wireless and cable-telephony voice mail and e-mail, national marketing initiatives and back-office integration.
Timing details were not clear -- the companies spoke of offering an integrated service before the middle of 2006. They said the integrated offering will give customers the opportunity to not only program their DVRs, but also to watch unique content (initially programming from their DVRs and video-on-demand services) and, eventually, live television.
While most cable companies’ programming deals won’t allow them at the moment to offer video programming from all cable channels via wireless, the operators were confident that they could reach some kind of middle ground.
At a press conference announcing the deal here Wednesday afternoon, Comcast chairman and CEO Brian Roberts said that while all of those deals haven’t been worked out yet, the most important aspect -- getting the technology and infrastructure in place -- is basically done.
“I would use the analogy of on-demand -- first you’ve got to build the platform, and then you go out and try to procure the rights,” Roberts said at the press conference. “Today, as we’ve had our typical conversations, this technology, this capability was not there. There may be some specific cases where we have the rights, but in most cases, it’s a new opportunity.”
Roberts added that he was confident that programmers would warm to the prospect, especially if there is an opportunity to generate revenue on the new platform for them through subscriptions to the service, new advertising opportunities or both.
“There’s no doubt that content companies are going to want to take advantage of that,” Roberts said.
Time Warner Cable chairman and CEO Glenn Britt said his company -- a division of programming giant Time Warner Inc. -- knows content, and programmers are constantly looking for new forms of distribution, which the Sprint Nextel deal will create.
“Of course, there will be deal-making, what have you, but I think this is a good thing for content people,” Britt added.
The cable group -- which has a total of about 41 million subscribers and passes more than 75 million homes -- will be able to sell the wireless service to its subscribers as well as current Sprint Nextel customers. The service will be sold through the cable group, 1,600 Sprint Nextel retail stores and third-party retailers including RadioShack Corp. stores across the country.
The five companies also agreed to work together on potential future-generation wireless-technology business plans for new services that could be provided using Sprint's Broadband Radio Spectrum (2.5 gigahertz), with the goal of further integrating wireline and wireless services.
Pricing of the new services will be determined by the individual cable operators and Sprint Nextel in each specific market. The MSOs will be responsible for billing and customer service.
But whatever the ultimate price of the service, having wireless capability will help cable operators to reduce churn, Cox CEO Jim Robbins said.
“The fact of the matter is that our customers will stay with us longer and more of them are gong to stay with us with more products by having wireless in the mix,” he added.
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