Embarq Readies Its 'Fourth Screen'
With the latest attempt by a phone company to ward off traditional fixed-line subscriber defections, Embarq Corp. (NYSE: EQ) is set to announce on Monday the launch of its new Broadband Home Phone.
One reason wireline subscriber numbers are on the decline, according to Embarq, is that the home phone hasn't seen anything new since the touchtone cordless came around. Embarq is looking to change that.
“People talk about three-screen technology, but there’s actually a fourth screen and that’s the home phone,” says Dennis Huber, senior vice president of corporate strategy and development for Embarq. “It really hasn’t changed for years, but we can invest and make that home phone as cool of a device as the rest of the services.”
So what is the Broadband Home Phone and what does it do? It’s an advanced cordless phone that combines your home phone service with your broadband service to provide users with the type of information off the Internet they’d want quickly and instantaneously. For now, Embarq has determined that information to be weather, yellow page directories, movie information, sports scores, and news headlines.
“How do you find the latest scores? You can wait till it scrolls across the screen on ESPN, or you can find your laptop or PC. Or, why not just have it so that people can pick up their home phone and have that information at their fingertips?” Huber rhetorically asks.
Embarq will be selling the phone for $130 at its retail stores. Additional handsets can be purchased for $50. Customers, of course, must have Embarq’s home phone and broadband services, but there is no additional monthly investment required beyond the purchase of the device, which further illustrates its purpose as a churn reducer rather than a new source of revenue.
“This is not about us getting into the business of selling telephones,” says David Rondeau, Ego Maniac of Product Development for Embarq. (I swear to God, that’s his real title -- just look at his business card.) “The upside is the churn reduction, but also truly bundling our services so that they’re interacting together and not just being sold together.”
Embarq, though, says it does have plans to develop the broadband phone to the point where it could bring in some money.
“There are services that we have waiting in the wings that will be revenue generating,” Rondeau says, the most logical one being a landline SMS text messaging service. Huber adds that the ability to screen a voicemail being recorded in progress is another service it is hoping to add by the end of this month.
At its core though, the broadband home phone is a simple device targeted for simple people. “Grandma’s never going to buy a BlackBerry, but she might buy this,” Rondeau says. And while Grandma might be dead soon, Huber is quick to point out that 83 percent of people in general say they plan to keep their home phone service.
“I’m a firm believer that home phone connectivity is going to be there for a long time,” says Huber. “And wireless will never have the bandwidth that wireline does. We’re going after those 83 percent of people trying to add value to their home phone.”
While Embarq’s home phone performs functions that almost any basic wireless phone can already do, Huber contends that wireless service -- especially in Embarq’s suburban footprint -- is still nowhere near as reliable as wireline. Additionally, he holds that the average person doesn’t have a wireless phone immediately at hand when getting home, saying they either leave it in the car, in their purse, or toss it on the countertop or near their bed.
Embarq says there is no other service provider yet that offers a home phone like this, which is why it plans to pace itself while bringing it to market. “We think that most people don’t know there’s a fourth screen, so we don’t want to outpace the market,” says Rondeau. “So we’re trying to show some restraint in quickly rolling out newer, fancier models.”
— Raymond McConville, Reporter, Light Reading