04 November 2005

Telecom "Triple Play"

This story reports on a recent deal in Telecom. This speaks to how telecom companies are positioning themselves in the future. How effective do you think a partnership like this will be, compared with the ownership-based strategy being pursued by Verizon and SBC (aka AT&T)? What are the pros and cons of each approach?

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KuangChiu Huang said...

I suspect the effect of “quadruple play” created by the joint venture between Sprint and 4 main cable operators, because, without a strong package, the result of economics of scope can not form compelling market power in soliciting or forcing customers; moreover, it seldom creates operation efficiency.
It does not sound persuasive to choose a recommended cable service from my mobile phone operator because I am its subscriber. The more possible model might be: Sprint acts as a wholesale provider for its wireless service and cable operators play as MVNO (mobile virtual network operator) to offer TV programs, high speed Internet, telephone and wireless together with one bill and some discounts. Such kind of service could be a similar service to compete with the package provided ILECs’ (IPTV, high speed Internet, telephone, and wireless). Maybe cable operators can not gain much from this joint venture (they do not have other choice instead of Sprint), but it is a great opportunity for Sprint to extend its business existence and obtain nearly free marketing commitment from cable operators.

Martin Weiss said...

Price Waterhouse Coopers (PWC) just posted this article (with links to a longer paper) that examines this in more detail (in case you are interested ...)