The recent news from Comcast, Time Warner, Cox, and Sprint is that Pivot is alive and kicking – welcome to the quad play of voice, video, data, and now wireless from the cable industry. Give the cable industry its credit – it has come a long way from its monopolistic ways of perceived poor customer service and lack of innovation to a well admired industry and a model for business opportunity execution. In a span of ten years, the cable industry has become the dominant provider of broadband in the U.S. and has probably executed on the triple play strategy better than any other industry. With its sights on wireless now, will it continue its impressive run?
Wireless probably represents the one service where cable recognizes its deficiencies. Unlike broadband and video service, it is truly coming to the game a little late. This is the domain of the telecom heavyweights, and they have a considerable lead. Cable recognized this and either shrewdly or mistakenly (time will tell) exercised the old adage, “if you can’t beat them, join them.” Hence the partnership with Sprint Nextel. Now it’s time to execute, and so far Comcast, Time Warner, and Cox are rolling Pivot out in limited markets including Boston, Phoenix, San Antonio, San Diego and Portland, among others. Pivot plans to be available in 40 markets by the end of 2007. Check out some early marketing promotions for Pivot from Comcast, Time Warner, and Cox. The Advance/Newhouse version of Pivot is coming soon.
The fundamental question on everyone’s mind is will the power of the bundle extend to wireless, removing a consumer’s potential apprehension of buying wireless service from a cable company. A potential strategy by all Pivot members is the appearance of the Sprint logo on all marketing material and on the mobile phones themselves. Perhaps a nod to cable’s insecurity in offering a telecom industry dominated service. Pivot’s strategy to grow their wireless market share appears to be two fold; 1) leverage cable’s impressive bundling strategy to win ”all” telecom services, and 2) introduce entertainment and wireless convergence applications like mobile TV and remote access of their TV programming guide. While expanding the triple play into a quad play or “home run” bundle makes perfect sense, the jury is still out on entertainment/wireless convergence. It’s simply too early to tell if consumers will find value in these services, and most importantly, will pay for them.
Another challenge for Pivot may be its dependence on Sprint. While this strategy does offer some advantages, drawbacks are present as well. Namely, Sprint’s struggles of late. Like many large scale mergers, the Sprint – Nextel version appears to be in trouble. Sprint is simply not executing the merger well and their declining subscriber counts prove it. If they become too distracted, will Pivot suffer? Of course every problem has a silver lining. Those very troubles may make Sprint vulnerable to acquisition – and the cable industry may be the prime suitor, providing the cable industry control of an advanced nationwide wireless network, which depending on the timing, may include a WiMAX network as well. Now that would be interesting.