The triple play has historically been defined as a bundle of voice, video, and broadband. And of late, the cable industry seems to be executing a triple play strategy quite well. For example, Comcast’s triple play strategy execution has helped vault them to the fourth largest phone company in the U.S. (by access line count) – all within three years. How many decades did it take Embarq/Sprint to be the fourth largest traditional phone company? If you look at recent quarterly reports, cable companies seem to be executing the triple play better than their telco competitors. Take a look at each industry’s core product. Comcast lost 132K of its core product (basic video subs) last quarter. AT&T and Verizon’s losses in core product (switched access lines) are now being measured in millions each quarter. Current indications suggest that a triple play bundle of voice, video, and broadband favors cable companies.

But what if the future of triple play really involves wireless? Whenever wireless is injected into a bundle discussion, it’s seems to be as a part of a “quad play” – voice, video, broadband, and wireless. But what if we redefined triple play as wireless, broadband, and video. If the future of wireline voice service lies with IP, then there really is no reason to delineate voice and broadband separately. The two should be combined into “broadband,” since voice will simply be one of many broadband applications (you could conceivably say the same for video, but that’s the subject of another post). In this regard, future triple play strategies may shift to wireless, broadband, and video. If so, than despite the short term troubles of telcos relative to their cable competitors, the long term looks quite bright for the telcos who are fortunate to have wireless assets. Consider that in 2Q08, AT&T’s ($12 billion) and Verizon’s ($12.1 billion) individual revenue from wireless alone dwarfs Comcast’s total revenue of $8.5 billion. So while telcos may be licking their wounds over switched access line losses in the short term, they may well be positioning themselves for long term triple play dominance, with wireless at the center of their strategy.

Everywhere you look these days, you see chatter about a potential acquisition of Echostar/DISH Networks by AT&T. If you subscribe to the old adage, “where there’s smoke, there’s fire,” this must be a done deal. Of course we’ve seen this before. AT&T has been rumored to want to buy Echostar for years, and nothing has ever materialized. But if this deal does happen, it could take telecom competition into territory not witnessed before.

My main contention with this “unchartered territory” thesis is that should AT&T buy Echostar, they would immediately be in direct competition with Verizon and Qwest (among other incumbent telephone companies) for video services. Those of us who know telecom well understand that there has always been an unwritten rule about “baby bells" not entering each others incumbent territories to compete. The same rule seems to apply to large MSOs. But an AT&T/Echostar deal begins to soften this long held stance. Some would argue that AT&T and their telco peers began competing in each other’s territories long ago through wireless. That would indeed be true. But an Echostar deal could dramatically expand this growing competition between incumbent telcos, assuming there are no regulatory mandated divestitures in an AT&T led Echostar acquisition. Video has proven to be the “anchor tenant” for bundles. An AT&T owned DISH Networks could bundle video and wireless right out of the gate. Furthermore, as broadband wireless technology continues to evolve and mature, there is no reason why AT&T couldn’t soon offer triple/quad play bundles outside of their incumbent territory with broadband wireless powering the broadband and voice (using VoIP) portions of the bundle. This line of thinking synchs well with their recent purchase of Aloha’s 700 Mhz spectrum. I certainly recognize there are a lot of “ifs” in this analysis, and some may characterize it as wild speculation. But I would contend that it’s not too far of a stretch to suggest that we could soon see AT&T, Verizon, Qwest, and other telcos competing with each other in their incumbent territories for high value multi-play subscribers. Wireless, both terrestrial and orbital, will power this competitive evolution. AT&T’s potential purchase of Echostar may lead the way.

Cox announced the launch of their Pivot Wireless service in northern Virginia, a key suburb of the Washington D.C. market. Northern Virginia joins markets in Arizona, New England, Oklahoma, and San Diego where Cox has launched their Pivot Wireless service. Pivot is joint venture with Sprint, where the Sprint wireless network is the underlying carrier. Pivot attempts to link cable service with wireless by offering services like mobileTV and the ability to search TV listings from a mobile handset.

See the northern Virginia launch details in this Washington Times article.

Cable MSOs addressed their Pivot wireless plans at the SCTE Cable-Tec Expo 2007, saying caution was a common approach. Multichannel News reports that executives from Comcast, Cox Communications and Time Warner Cable all say they are taking their time with Pivot roll outs. All of the MSOs report ‘several thousand’ Pivot wireless subs in their limited market launches. They all shared similar challenges of integrating Pivot wireless customer support functions into their cable CRM functions. Advance/Newhouse has yet to deploy, but says it plans to soon. Smaller cable MSO’s, including Suddenlink, expressed interest in joining the Pivot wireless joint venture, which is partnered with Sprint.

You don’t have to look far to see evidence of this cautious approach. Cursory glances at all the MSO website homepages, reveals no reference to wireless service. You have to go to specific geographic targeted sites to find anything about wireless. Contrast that with Verizon and AT&T, who not only make wireless very prevalent on their homepage, but also make video a strong focus. Without question, wireless will be a determining factor among potential quad play bundle subscribers. Cable MSOs appear to be executing well on the triple play, but it remains to be seen if they will be able to translate that success to the potentially lucrative quad play. Telecom providers have a lead in wireless, but can they leverage it to take the quad play lead? Interesting debate, with huge implications for both telecom and cable.

Verizon announced their intention to start bundling wireless service with their current triple play offerings. Cable heavyweights including Comcast, Time Warner, and Cox have all launched quad plays in limited markets through their Pivot Wireless brand (see our feature story on Pivot Wireless). Verizon thinks they have an advantage since they own (in partnership with Vodafone) and control their wireless network, unlike their cable rivals who are basically reselling Sprint wireless service.

Check out this Reuters summary.

Cable’s foray into the mobile arena has begun, and it should get interesting over the next few years. The Sprint Nextel partnership with Comcast, Time Warner, Cox, and Advance/Newhouse is beginning to see light, with cable companies launching mobile wireless service in select U.S. markets. While their initial offerings are somewhat slim, compared to other wireless powerhouses like Verizon Wireless and Cingular/AT&T, it’s very early in the game. Cable definitely has some perception issues to overcome, but who would have thought a decade or so ago that cable would become the leading provider of broadband in the U.S. Stay tuned.

Read this Boston Globe article for additional insight.