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Smaller Cable Operators Looking to Offer Wireless
31 Jul, 2007
According to a Multichannel News report, the National Cable Television Cooperative (NCTC) is in discussions with Sprint to resell wireless service. NCTC executive vice president Scott Abbott noted that the discussions are very early on and no deal is imminent. It is unclear whether such a potential arrangement would be an extension of the Pivot Wireless initiative, or just a straight resale arrangement for Sprint services. Like their larger cable TV brethren, small independent cable companies want in on wireless. They recognize that the current battles with telecom are only going to become more intense, and offering wireless may prove to be a necessary component to effectively compete.
It should come as no surprise that the NCTC is talking with Sprint about wireless resale. Sprint has long partnered with NCTC member companies, acting as a wholesale VoIP/telephony provider for voice services option. Extending that relationship to wireless is only natural. An interesting question is about branding. If the Pivot wireless brand begins to gain traction nationally and sees some success, than extending that brand to independent cable companies could be of great value to them. Wireless is one of those services where a local brand may not provide as much value as a more nationally recognized brand. It’s very difficult to compete against a Verizon Wireless or T-Mobile brand on a local level, when those companies spend billions of dollars (collectively) on marketing and brand recognition. Wireless may be one of the few services where it makes sense to align one’s self with a national brand. That being said, there are a number of pitfalls in doing that. Finding the right relationship is difficult. In a near perfect world, a small local operator wants to control their own network and customer relationships, while also leveraging that national brand recognition. Such a relationship is hard to come by, and NCTC will be challenged to negotiate a deal that make preferred terms a reality.
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Should Telephone Service be Free?
12 Oct, 2008
Comcast announced a new promotion last week that offers 12 months of free basic cable service for new customers who also sign up for an additional service. Customers who don’t want an additional service can get Comcast’s basic service of about 20 -30 channels for $10/month. The promotion is tied to the digital TV transition of February 2009 and entices potential customers to avoid the transition “hassle” by getting “free” cable service. “The simple fact is that basic cable is the easiest path through the digital transition and now consumers can get it for free,” said Derek Harrar, General Manager and Senior Vice President, Video Services for Comcast in a company statement. This move is similar to strategies pursued by other video service providers, who are hoping to leverage the digital TV transition for new subscriber additions.
But is this strategy a leading indicator for the future? Should basic core services like basic cable and basic telephone service be offered for free, used as a “carrot” to entice customers to buy “more important” services like broadband? Maybe a very basic phone service, with no LD, access to landline 911, and maybe outgoing service only (to avoid telemarketers) should be a free component of a bundled offering. Such a wireline service may appeal to a customer who previously cut the cord for wireless only, but also needs broadband. There is a growing portion of the population who find the value of traditional wireline phone service elsewhere – either through wireless or broadband/IP services. But, if they could get the security of landline 911, and an extra dial tone in their home as a free value add for subscribing to broadband (or video from a telco’s perspective), maybe a telco’s bundled offering may look more attractive than a comparable cable offering. I realize this idea is not appealing to the hundreds of ILECs who are a part of the current access/settlement system (in fact, it couldn’t work in the context of today’s regulatory structure), but I wonder whether it’s inevitable. In this possible future scenario, the current settlement system adapts to broadband as the underlying service, as opposed to voice.
This scenario cuts both ways. From a cable company’s perspective, a growing portion of the population is turning to the Internet as a source for their video content, and no longer see value in paying for a broad package of video as a part of a traditional subscription pay-TV service. But, if they could receive basic TV (which includes local broadcast affiliates) as a free value add for buying broadband, maybe the cable bundle is more attractive. In a true IP/broadband world, very basic phone and video service is relatively easy to deliver, and has little impact on bandwidth and network performance. Maybe the digital transition is opening the door to a future where free basic services are a regular component of a bundled offering. Thoughts?