Cable Firms, Sprint In FMC Deal

A quartet of U.S. cable operators has reacted to the combined fixed/mobile might of the leading RBOCs by forming a joint venture with Sprint Nextel Corp. (NYSE: S) to develop converged fixed/mobile services.

Collectively, the four cable operators -- Advance/Newhouse Communications, Comcast Corp. (Nasdaq: CMCSA, CMCSK), Cox Communications Inc. (NYSE: COX), and Time Warner Cable -- will invest $100 million in the joint venture (JV), with Sprint Nextel stumping up the same amount. That cash will fund "the development of the converged services, national marketing initiatives and back office-integration," the partners stated.

The agreement, which is exclusive for the first three of its 20-year term, will see the JV "develop converged next generation products for consumers that combine the best of cable's core products and interactive features with the vast potential of wireless technology to deliver services anywhere, any time," according to a prepared statement.

These products, or services, will be marketed to the cable operators' 41 million customers and Sprint Nextel's 46 million wireless subscribers. Participation by other cable operators is a possibility, noted the firms.

The move comes as the RBOCs plan their own converged fixed/wireless and IPTV services that will compete directly with the cable operators. (See SBC Stretches Lightspeed Timeline , SBC Jumps on Lucent IMS Bandwagon, BellSouth: The IMS SuperBowl? , BellSouth's Smith Details IPTV Plans, and Verizon Attacks Video's 'Biggest Barrier'.)

The cable quartet and Sprint plan on moving fast. They plan to launch a quadruple-play (or 'four-play') service of video, wireless voice and data services, high speed Internet, and cable phone service (or any combination of those) in 2006. They also plan to develop and market co-branded, integrated cable/wireless services that can be accessed by a single device, using Sprint's 1,600 retail outlets, RadioShack stores, and the cable firms' own outlets to push the new services.

These services include a single voice mailbox for calls received at home or to the customer's wireless handset, wireless access to the customer's cable email account, streaming entertainment services to the wireless handset across Sprint's EV-DO wireless data network, and unified billing.

— Ray Le Maistre, International News Editor, Light Reading

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