Time Warner Cable is in discussions with Sprint PCS to test a wireless offering that would be bundled with the media giant’s TV, landline phone and Internet services. However, it is unclear whether Time Warner Cable will offer the services under its own brand as an MVNO or under the Sprint brand through a resale agreement.
A representative for Time Warner Cable said the company is “working on plans” for a wireless trial with Sprint, but declined to give any further information. Citing people familiar with the situation, the Wall Street Journal reported that the companies were working on a trial that would be conducted in Kansas City, Mo., within the next few months. The report said Time Warner would handle wireless billing, customer service and marketing, but that the specifics are unclear.
The negotiations between Time Warner Cable and Sprint highlight a number of issues for both companies. For Sprint, the discussions come as little surprise. The carrier has struck mobile virtual network operator agreements with the likes of Virgin Mobile USA, Walt Disney Co.’s ESPN sports company and Qwest Communications International Inc. The carrier even offers a brochure to cable companies advertising its wireless services. Although Sprint appears to be edging toward a “carrier’s carrier” business model-wherein it would resell its network to other consumer-focused companies-a Sprint spokesman said the carrier plans to balance its wholesale business with that of its consumer strategy.
Time Warner’s negotiations with Sprint are also somewhat expected. For months the company has been discussing its wireless intentions. An agreement with a wireless carrier like Sprint would give Time Warner Cable the so-called quadruple-play: wireless and landline phone service, video and high-speed Internet. Cable companies like Cox Communications and Charter Communications have discussed adding wireless to their bundles, but so far none has announced an agreement. The combination of wireless and cable is expected to entice and retain customers with a single, unified bill, as well as cut into the phone business of traditional phone companies like Verizon Communications Inc., SBC Communications Inc. and BellSouth Corp. However, the Baby Bells are fighting back with their own bundles, such as wireless, wireline and satellite TV offerings.
Interestingly, Time Warner Cable, Comcast Corp., Cox, Charter and several other cable companies are part of a consortium created to jointly offer wireless service. Those in the industry predict the consortium likely would enter into a resale or MVNO agreement with an established wireless carrier. A Time Warner Cable spokesman was not immediately available to discuss whether the company’s discussions with Sprint are associated with the consortium.
Sprint is not the only wireless carrier looking to the world of cable. A T-Mobile USA Inc. executive recently discussed the carrier’s plans to partner with a cable company.
Time Warner’s cable business-the country’s second-largest cable provider-is the media giant’s most profitable division. It counts around 11 million customers in 27 states and offers Voice over Internet Protocol landline phone services, high-speed Internet and TV. In the past nine months, Time Warner’s cable business recorded $6.3 billion in revenues, accounting for 20 percent of the company’s overall revenues.
For its part, Sprint offers wireline and wireless services to businesses and consumers, and already has several agreements with cable companies for landline telecommunications services. The carrier in 2003 signed a deal with Time Warner Cable to help develop the company’s VoIP offering, and in March Sprint announced regional cable company Sunflower Broadband would resell its wireless services under the Sprint brand.
“It’s always been the strategic intent of Sprint and those cable companies to put wireless in the mix,” said Jeff Shafer, a Sprint spokesman.
Sprint recently announced its intention to merge with Nextel Communications Inc.
