Analyst: MSOs Too Wary Over Wireless
"I still think [wireless] is not number one or two on the agenda. A good question is if it's even number three," says Heavy Reading senior analyst Alan Breznick, the author of Cable's Wireless Strategy: More Than Just Talk.
He says cable operators are spending more time and resources on residential VOIP and advanced video services, such as high-definition television (HDTV), but should be more aggressive about their push into wireless.
"I think they should place more emphasis on it," Breznick explains. "I think it's something they're going to need to do in order to compete effectively against phone companies that already have big wireless pieces."
But as Breznick shows, the MSOs aren't standing still when it comes to wireless market activity. His report provides updates on the "Pivot" joint venture between Sprint Corp. (NYSE: S), Comcast Corp. (Nasdaq: CMCSA, CMCSK), Time Warner Cable Inc. (NYSE: TWC), Bright House Networks , and Cox Communications Inc. , which is expected to offer services in a total of 40 markets by the end of 2007.
The report also explores: how some MSOs such as Rogers Communications Inc. (NYSE: RG; Toronto: RCI) are going it alone; the potential implications of the 2006 Advance Wireless Services (AWS) spectrum auctions; and the upcoming auctions of valuable 700MHz spectrum.
The MSOs, though, will find it hard to match the marketing campaigns of the major telcos, particularly those that carry a significant "cool factor," such as the iPhone launch by AT&T Inc. (NYSE: T) and its partner Apple Inc. (Nasdaq: AAPL). (See The iPhone Arrives.)
Instead, cable operators appear best positioned to offer a truly converged package of services. "That may be the one thing [cable] can do better, or at least quicker, than the phone guys," Breznick says.
In addition to sizing up the landscape, the report also speculates on whether the largest operators in the U.S. might decide to change gears and pursue a wireless strategy without Sprint. Despite cable's troubled history with partnerships -- which included the now-dissolved @Home project for high-speed data services and another cable-Sprint partnership that disbanded several years ago -- some believe the Pivot relationship will remain intact for some time still.
"For the foreseeable future, I think the partnership relation will continue. It's a great way to learn the business," Bob Scott, the director of business development and wireless for Scientific Atlanta , says in the report.
But a different story may emerge after cable gets its sea legs in the wireless business and the current three-year deal with Sprint draws to a close.
Breznick believes that relationship could be dissolved by the start of the next decade, unless cable remains reliant on Sprint's spectrum. "Who knows? Comcast may own Sprint by then," he adds, citing a persistent rumor that has yet to materialize.
— Jeff Baumgartner, Site Editor, Cable Digital News
The report, Cable's Wireless Strategy: More Than Just Talk, is available as part of an annual subscription (6 bimonthly issues) to Light Reading’s Cable Industry Insider, priced at $1,295. Individual reports are available for $900.