Wireless comes the partner
John Garcia does not believe in the "quadruple play," nor is he a big fan of "the bundle." As president of the Sprint Joint Venture with four large cable multiple system operators (with more MSOs likely to be added this year), Garcia is already eschewing terms that cable companies have extolled in their visions for their converged wireless and mobile future with Sprint.
But Garcia does focus on "integration" and his mandate to "create a better experience for the things that people already love to do," plus entirely new cross-platform voice, data and video services.
Much of the joint venture's first half-year has been focused on examining the key components of their alliance: infrastructure, sales, billing, repairs/customer care (see Figure 1). Eleven teams are focusing on specific technology and business factors. Details about provisioning, billing and the use of existing cable plant are still being developed, Garcia says, pointing out that the first co-branded services—due to appear by autumn—will largely rely on Sprint's current technology and systems.
Figure 1: Key components of the Sprint JV.
The initial seven markets for the "pilot" service—mostly mid-sized communities—were chosen because of Sprint's strong wireless presence in those areas. They include Portland, Ore. (Comcast), Austin, Texas and Raleigh, N.C. (Time Warner Cable). Cox Communications and Bright House Networks—the other cable participants in the JV at press time—will identify their participating markets within the coming months.
As the ventures' working groups focus on each of the key tasks, including the creation of new devices to handle innovative functions, equipment makers are courting them strongly. Garcia points out that the manufacturers "see the joint venture as a way they can learn what they need to build." He characterized the relationships as "tactical," providing an "exchange of ideas," but he did not identify hardware providers or their roles in the initial rollout phase.Bandwidth management
Garcia expects that by mid-2007, Sprint and another wireless carrier will offer enhanced "combination phones" (i.e. those that are capable of handling WiFi and cellular connections) and the joint venture allows the "cable partners to [help] engineer a better phone" for such services. Voice over Internet Protocol is emerging as a major component of the new service. In particular, Garcia says that the cable members of the working groups are focusing on voice call quality when they offer VoIP, concentrating, for example, on bandwidth management to assure that voice calls are never squeezed out by data or video demands through the network.
In its organizational chart of functions and services (see Figure 2), the joint venture identifies "customized content" and "service bundles" extending across its platforms. Although the terminology seemingly contradicts Garcia's disregard of "the bundle," the mission's overall emphasis is on "unique converged services."
Figure 2: Functions and services tied to the Sprint-cable JV will key on convergence.
Among the ways the alliance seeks to achieve that goal is by plugging into the Broadband Radio Service (BRS) 2.5 GHz spectrum. Sprint, which has access to BRS in 85 percent of the nation's top 100 markets, plans to begin operating by 2008. Garcia calls it a "major shift in technology" that can provide "dynamic multi-modal" and "radical" services. BRS runs far faster than today's telco wireless options, such as Verizon's EVDO service that operates at 300 to 500 kilobits per second.New user interfaces
"Integration" recurs frequently throughout the partners' remarks about their joint venture plan. Mimi Thigpen, vice president of strategy for Cox Communications, describes the "converged services" of "entertainment, information and communications." She stresses the value of an integrated management and control structure.
"The goal is to deliver seamless experiences," she says, citing "integrated cell and home phones, especially to reach families at little or no incremental cost."
"Robust multimedia devices" that enable services to move around inside the home and can also be used from remote locations are high on Thigpen's agenda.
To achieve the necessary and consistent interface, the Joint Venture team is working on components, such as converged applications, a peered operation system and network operating system. The group expects to use IP Multimedia Subsystem (IMS) technology, which is expected to simplify the development process. IMS is also a key component of the recently-issued CableLabs PacketCable Release 2 specifications.
The phones in phase one, due to begin later this year, will be versions of Sprint's current wireless devices. By phase two (date not yet set), entirely new technology and devices will be used, according to executives of the MSOs.
Initially, the customer target is the typical cable household that also uses mobile phones. Thigpen expects that at a later time, the venture will offer products and services catering to "more segmentation," but she stops short of describing how those customized elements will be developed.
"Each company is looking 24 months out," says Thigpen. "One big question is how do we on-ramp (to cable) without slowing down our expectations on time to market."
Among the other major challenges of the collaboration is a billing system, to recognize the "shared" customer and enhanced services being accessed. Neither Garcia nor MSO executives are yet ready to discuss how that complicated process will be resolved.
Thigpen acknowledges the "complexity of how to blend local and national services, while preserving brands and advertising."More MSOs ready to join
Despite the range of business, technical and marketing challenges (not to mention the cultural expectations of each partner), the group has "made more progress in the first 100 days than any other joint venture I've [seen]," says Tom Nagel, senior VP of wireless services at Comcast.
Other MSOs are eyeing the alliance's progress with the expectation that they may buy into the venture soon. Under the current structure, Sprint/Nextel owns 50 percent of the joint venture, based on its $100 million/three-year commitment to the seed funding. The four MSOs own the other half, apportioned based on their relative size (i.e. number of subscribers). Within the coming year, more MSOs may be added, with Bresnan Communications—already an aggressive VoIP provider—mentioned as a likely participant. Bresnan's present VoIP partner, Net2Phone, is also working on a wireless overlay for its MSO customers, which also include Atlantic Broadband, Liberty Cablevision of Puerto Rico, Millennium Digital Media, Northland Communications and CMA Communications.
Meanwhile, existing partners continue to voice their enthusiasm for the innovation they envision from the joint venture. At the Cellular Telecommunications & Internet Association (CTIA) convention in early Spring, Time Warner Cable President/CEO Glenn Britt, in his keynote remarks, focused on the goal to "offer attractive new products and services" through the Sprint alliance.
"The real promise is the capacity to offer a host of innovative new services that can tie into the video, data and phone products that we and Sprint-Nextel already offer," Britt said, adding that such integration will "prevent it from becoming a commodity business." He cited services such as unified messaging, programming a digital video recorder from a mobile device and management of address books, calendars and picture libraries from any location.
Britt's enthusiasm—matched by his MSO colleagues—is placing greater attention on the Sprint joint venture. As the consolidating AT&T (soon to absorb all of Cingular wireless under its brand) and Verizon ramp up their video offerings, the pressure grows on the Sprint consortium. It must not only accelerate its cross-platform agenda, but also establish its service and content "bundle"—or whatever John Garcia wants to call it.