The agreement, announced Wednesday, pairs Sprint Nextel with Comcast Corp., Time Warner Cable, Cox Communications and Advance/Newhouse - MSOs that presently serve more than 41 million cable subscribers and 75 million homes passed combined. Sprint, meanwhile, has nearly 46 million wireless customers.
The resulting joint venture will begin to market mobile services next year. The cable operators involved will also have a major retail presence through Sprint's 1,600 outlets, as well as third-party distributors such as RadioShack.
The deal gives those cable operators the much-coveted quad-play of video, voice, data and mobile services, and will keep them competitive with telcos such as Verizon, which is just getting a video offering off the ground.
Rather than a traditional MVNO (mobile virtual network operator) agreement, the Sprint-cable deal will enable the operators to maintain a direct relationship with the customer, handling everything from billing to customer care.
The J.V., mutually exclusive for three years and running for a total of 20 years, is valued at $200 million. Sprint will commit $100 million, and the four cable operators will put in the other $100 million.
Those funds will go toward the development of next-gen "converged" services. Likely among them are fixed mobile convergence (FMC) devices such as dual-mode phones capable of connecting through cellular and WiFi networks. The cash will also support national marketing initiatives and back office integration efforts.
Mobile video is also expected to be part of the combined offering. Sprint's next-gen cellular network is based on EV-DO (Evolution Data Optimized or Evolution Data Only) technology, which has an advertised rate of 1.5 Mbps, with burst capabilities of about 2 Mbps. EV-DO eventually will also enable cable customers to program their digital video recorders remotely, and access music and games, the companies said.
"The new Sprint-cable partnerships will forever transform what used to be merely a cell phone into an indispensable third screen in customers' lives," said Sprint Nextel CEO Gary Forsee.
They have also agreed to explore services that tap Sprint's Broadband Radio Spectrum, which resides at 2.5 GHz.
The J.V. also plans to seek additional participation from other cable MSOs. Sprint already has third-party VoIP connectivity agreements with several other MSOs, including Mediacom Communications, Charter Communications, and Cablevision Systems Corp. Sunflower Broadband of Lawrence, Kan. currently resells the Sprint mobile voice service.