Sprint Nextel Expands Mobile Cable/Telephone Partnership

Sprint Nextel Corp. is expanding its mobile phone alliance with cable companies Comcast Corporation, Time Warner Cable, Cox Communications and Advance/Newhouse Communications by adding 32 new cities to the eight that already have "Pivot." The Pivot service allows mobile phone users to link to their home phones, high speed internet and digital cable service, enabling mobile TV watching, email and voicemail access and unlimited calls between land, wireless and cable lines. Sprint also announced Monday a $2.5-3 billion investment in its high-speed WiMAX multimedia infrastructure. Pivot is part of the cable/Sprint partnership's ultimate plan to sell bundled video, internet and phone services to small businesses, enticing them away from local phone companies. Comcast announced in January its plans to capture 20% of the small business market with its internet, voice and video services. The joint venture's head, John Garcia, said the bundled service is already being tested in an unnamed city, calling small businesses "the next market."

Sources: Wall Street Journal, Mercury News, Kansas City Business Journal, Trading Markets
Commentary: Sprint-Nextel LBO Speculation Resurfaces: Why Now? • Sprint Loses More Subscribers Than Expected • Will Sprint Join the MobileTV Bandwagon?
Stocks/ETFs to watch: Sprint (S), Comcast Corporation (CMCSA), Time Warner Cable (TWC). Competitors: Verizon Wireless (VZ). ETFs: iShares Dow Jones U.S. Telecommunications Index (IYZ), PowerShares Dynamic Telecommunications & Wireless (PTE), PowerShares FTSE RAFI Telecommunications & Technology Portfolio (PRFQ), Vanguard Telecommunications ETF (VOX)
Conference call transcripts: Sprint Nextel Q4 2006, Comcast Q4 2006

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Comments

[Julio:]

"Comcast announced in January its plans to capture 20% of the small business market with bundled wireless services."

Your facts are a little off. Comcast indeed plans to capture 20% of the small business market, but with their traditional triple play product offering, not with bundled wireless. It has repeated stated that it does not intend to compete "on minutes" in the wireless arena, and is still trying to figure out what to do with the product.

From their Q4 earnings call:
"We have no announced plans for any activity out of Spectrum Co. that you haven’t already heard about. But it’s an area that I think we have a lot on our plate in ’07. We will be doing some work with Sprint in a couple of markets to roll out wireless, to see if Quadruple Play has a meaningful difference than Triple Play, better or worse to the consumer.

Other cable operator partners will be doing different versions of that, but one of the benefits of working in partnership with Sprint is we are going to get to see what ideas work and what ideas don’t work, and we continue to monitor it."

2007 Apr 02 12:39 PM

[Judy Weil_:]

Dear Reader,

I thank you for your comment. I have clarified above that although the bundled wireless service includes internet, voice and video, Comcast is indeed seeking to capture 20% of the market with those services alone. It will be interesting to see what they ultimately do in the wireless market!

All the best,

Judy Weil

2007 Apr 03 02:22 PM