Time Warner Confirms Sprint Talks

Time Warner Cable has confirmed that it is in discussions with Sprint Corp. (NYSE: FON) to offer a quadruple play – a full set of data, video, telephone, and mobile services. The companies are reportedly close to a deal that would enable Time Warner to offer cellphone service on a trial basis early this year.

The talks were first reported in the The Wall Street Journal and, should they eventually result in a deal, it would make Time Warner the only major cable company offering mobile services to its customers.

Sprint spokesman Jeff Shafer would not confirm that a deal was imminent, but did say that the company continues to be in talks with all its cable partners about wireless opportunities.

"It's compelling for cable companies to be able to offer quadruple-play services to their customers," Shafer says. "Sprint is in a unique position, because we are the only company that can bring wireless and wireline services to the cable companies. We feel we bring a lot to the table."

Published reports say the Time Warner/Sprint trial service would be limited to Kansas City, but Shafer hints that the deal, if consummated, would cover a wider area. When pressed for details, he deferred to Time Warner Cable.

Time Warner spokesman Keith Cocozza says his company is working on plans for a wireless trial with Sprint, but wouldn't reveal any details. "We know that cellphone service is a service that we want to get into," Cocozza says. "It's just a matter of how we're going to get into it."

Time Warner, the country's second-largest cable operator with nearly 11 million subscribers, recently launched landline telephone service using IP technology in all of its markets (see Cable Gets a Vault from VOIP). The company has more than 200,000 landline phone subscribers and is adding 10,000 customers a week.

"Wireless is a value-added service that is the next logical step for cable companies to offer their customers," says Sprint's Shafer. "They have more than 20 million homes that they can help sell these value-added services to. The advantage of partnering with cable companies is that it improves network economics. The way we see it is that the more customers we have, the better."

Cocozza notes that besides being in talks with Sprint, Time Warner is also part of a cable consortium looking at options for providing wireless service. These options include:

• Buying an existing cellular operator;
• Starting a new venture;
• Reselling an existing carrier's service, the most likely option; or
• Starting a wireless service from scratch, which would cost billions.

Of course, cellphone services aren't the only wireless interest tickling cable companies these days. Yesterday, Charter Communications (Nasdaq: CHTR) announced a deal with RemotePipes Inc. to provide its Internet subscribers with dial-up and wireless Internet access while they're traveling (see Charter, RemotePipes Offer Wireless).

The ultimate goal is the same for cable companies as it is for the telecom incumbents: to grab as much of each customer's entertainment and communications budget as possible (see SBC: 'Let Us Entertain You!').

Sprint's Shafer says that while quadruple-play services are still months away, the benefit for consumers will be obvious. "The real magic will happen when everything works together."

— Chris Somerville, Senior Editor, Next-Generation Services