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Terms of the Cable Cell Phone Agreement (Sprint)
The joint venture, which is mutually exclusive for three years and has a 20-year
term, calls for a combined initial financial commitment of $200 million, $100
million of which will be committed by Sprint and $100 million of which will be
committed collectively by the cable companies. The investment is expected to be
used to fund the development of the converged services, national marketing
initiatives and back office integration. The companies contemplate additional
participation from other cable companies.
Beginning in 2006, the companies in the joint venture plan to:
Offer consumers access to the expanded four element bundle, or "Quadruple Play,"
or any combination of services including video, wireless voice and data
services, high speed Internet and cable phone service
Serve growing consumer demand for a wireless "third screen" beyond the TV and
computer screens
Develop and introduce new co-branded wireless devices that will provide new and
unique features that integrate cable and wireless services all on a single
device
Sell and market these co-branded products and services to customers through a
combination of 1,600 Sprint retail stores, cable retail outlets and other
third-party distributors, including thousands of RadioShack stores
Unlike MVNO (mobile virtual network operator) or other wholesale relationships,
the companies participating in this joint venture will retain full economic
benefits of the acquired customers, similar to what they currently enjoy through
their direct retail channels.
Next generation wireless products and services
The next generation wireless phone will be designed to connect customers of
Comcast, Time Warner Cable, Cox and Advance/Newhouse Communications to Sprint
through Sprint's nationwide high-speed Power Vision™ EV-DO (Evolution Data
Optimized) network and integrate products from each cable company. Customers
using the converged services will be able to seamlessly interface between email,
home and mobile voicemail, Digital Video Recorders (DVRs) and photo programs. An
interactive demonstration of these capabilities and services can be found at
http://64.207.132.216/. The parties plan to implement and sell Power Vision™ EV-DO-enabled
handsets and service packages that will enable customers to:
Use interactive features like remotely programming their home DVRs
Have a single voice mailbox that serves both the home and the wireless phone
Access innovative new calling plans which allow for unlimited calls between the
home and the wireless device
Surf the Internet using their cable Internet portal
Send and receive e-mail from their cable high-speed Internet account
Access unique content like streaming television programming, music, video clips,
games and pre-recorded DVR programs
In addition, the five companies have agreed to work together to explore
potential next generation wireless technology business plans for new services
that could be provided using Sprint's Broadband Radio Spectrum (2.5 GHz), with
the goal of further integrating wireline and wireless services. This spectrum
has the capability to provide high-speed data connectivity that can help deliver
an even wider and richer array of entertainment and communications services.
In each market, the price of the integrated offering will be agreed to by Sprint
and the cable company serving that market. Each cable company will be
responsible for billing customers and for customer service in its territory for
the converged offering. Customers can enjoy the convenience of a single bill for
all of their services, including video, data, phone and wireless.
Gary Forsee, president and CEO of Sprint Nextel 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. By giving consumers more access
to information, entertainment and data from their cell phone, we will create
more loyal customers, and we'll further drive our growth. With the convergence
of technologies and capabilities accelerating, we will create personalized
content, useful innovative applications and easy-to-understand navigation
required by consumers. Together with our cable partners, we will have the unique
content and distribution assets to realize this opportunity."
Brian Roberts, chairman and CEO of Comcast Corporation said, "This agreement,
which represents the most expansive technological convergence of its kind, will
deliver to our customers an unprecedented level of real-time, high-speed
mobility and access to content all in a single package. We have always believed
cable provided the best available entertainment and communications experience,
and by teaming up with other leaders of our industry, we will now take that
competitive advantage to the next level. Together with Sprint Nextel, we look
forward to developing fully integrated products that give our customers an even
better entertainment experience whether they are in the home or on the move."
"We believe this joint venture is the right way for cable operators like Time
Warner Cable to fully engage in the wireless business in the most
customer-friendly and least capital intensive manner," said Glenn Britt,
chairman and chief executive officer of Time Warner Cable. "This is really about
much more than adding a fourth element to our existing video, data and telephone
bundle. It is about developing a wireless platform that connects all of our
services for the customer both inside their home and when they are on the road."
Jim Robbins, president and CEO of Cox Communications said, "This revolutionary
partnership will forever change the way Americans consume entertainment,
communicate and exchange information. With more than 3 million Cox customers
already choosing to bundle at least two services, and more than 1 million
bundling cable TV, high-speed Internet and telephony, our company has been
realizing the benefits of bundling for some time now. We look forward to further
increasing our customers' satisfaction by adding new wireless services,
increased integration and portability."
Robert Miron, chairman and CEO of Advance/Newhouse Communications said, "We
welcome this opportunity to join our partner Time Warner Cable, as well as
Comcast and Cox, in this very worthwhile initiative, which will enable us to
offer our customers a wireless addition to our product line of digital cable,
high speed data services and digital phone, and future cutting edge innovations
to be developed by the venture."
Media Luncheon and Product Demonstration
The CEOs of Sprint Nextel, Comcast, Time Warner Cable, Cox Communications and
Advance/Newhouse Communications will hold a luncheon for the media and product
demonstration today at 1:00 p.m. ET in the Le Trianon room on the second floor
of the Hotel Plaza Athenee, located at 37 East 64th Street in New York City.
Reporters who cannot attend may call into a teleconference to listen to the
event and ask questions. U.S. reporters should call (866) 297-4539 and
international reporters should call (706) 679-9046. The conference call ID
number is 2067146. A replay of the call will begin at 5:00 p.m. today and will
be available for 24 hours. To access the replay, please call (800) 642-1687 or
(706) 645-9291 and input the conference call ID number 2067146. The conference
call will also be webcast and can be accessed at http://www.videonewswire.com/event.asp?id=31227.
The interactive demonstration of these capabilities and service can be found at
http://64.207.132.216/.
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