Cable Makes Headway with VoIP Services

Sprint (News - Alert) and its four cable partners are making significant progress integrating their respective offerings and at this week’s National Cable & Telecommunications Association (NCTA (News - Alert)) convention in

Sprint has now catapulted close to Vonage (News - Alert)’s industry leading levels, serving more than one million voice over Internet Protocol (VoIP) subscribers for the cable industry, a fourfold increase from the previous year, the company said in a press statement on Monday.

The gains come as the cable industry itself is making considerable progress in ramping up its digital voice telephony services. Leveraging the spotlight from NCTA’s National Show, Comcast (News - Alert) today announced it has partnered up with retailing giant Wal-Mart to offer Triple Play bundled services in approximately 500 stores that reside in Comcast’s footprint. And some analysts don’t foresee regional Bell operating companies (RBOCs) in overlapping footprints threatening their cable counterparts any time soon.

“With the RBOCs in less than 1 million homes marketing video and DSL rolled out to only 85 percent of their footprints, cable will continue to have the clear Triple-Play advantage for some time and we expect a 56-percent increase in 2006 net telephony adds for the cable sector to 3.5 million and 8.9 million ending subscribers for an impressive 10.4 percent penetration of the market,” estimated Doug Mitchelson, analyst with Deutsche Bank.

Because of Comcast’s aggressive marketing efforts, Mitchelson believes the cable operator might exceed Wall Street’s estimates for the first quarter of 200,000 additional Comcast Digital Voice subscribers. “This could mark an important inflection point for Comcast, and thus the sector, due to momentum in voice finally exceeding the Street and beginning to see a halo impact on the rest of their business including an improvement in basic subs losses year-to-year,” the DB analyst reported.

Among the new technologies that the cable industry plans to demonstrate with their new wireless partner is the ability to roam seamlessly between a Sprint wireless phone and the in-house wireless, high-speed data networks of the cable subscribers. In addition, the companies will demo the ability to transfer video content from a networked digital video recorder onto Sprint phones.

The demos come as the joint venture has reportedly chosen seven markets to launch pilot programs starting in the second half of the year – in line with previous company estimates for service rollout. The Wall Street Journal reported that the venture will begin offering a combined wireless and cable service in two Time Warner cable markets, Austin, Texas, and Raleigh, N.C., and two Comcast Corp. systems, Portland, Ore., and a New England city that Comcast declined to identify for competitive reasons. Likewise, the two other cable partners in the venture, Cox Communications Inc. and Advance/Newhouse Communications Inc., declined to identify their first markets.

In addition, Sprint has signed VoIP agreements with several new cable companies, including WEHCO Video, NPG Cable, Inc. and Shrewsbury Electric and Cable Operations (SELCO), Sprint reported on Monday.

“We are continuing to execute against our vision of being the premier partner to the cable industry,” said Jim Patterson, vice president, cable solutions for Sprint. “Today, Sprint's wireline cable partners rely on our operational experience to enable quality VoIP services and bundled offerings in twenty-four states. We are continuing to pursue additional customers and territory expansion, even as current market penetration grows.”

----

Robert Liu is Executive Editor at TMCnet. Previously, he was Executive Editor at Jupitermedia and has also written for CNN, A&E, Dow Jones and Bloomberg. For more articles, please visit Robert Liu's columnist page.

[ Back To TMCnet.com's Homepage ]