I don’t have a subscription to the Wall Street Journal Online, but the daily eletter FierceWireless has a story today based on a WSJ story which says the big cable companies are considering a joint venture that will put them in the cellular telephone business.
Here’s the full entry from today’s edition:
1. Rumor Mill: Cable companies may launch cell phone joint venture
A group of the country’s leading cable companies are in talks to form a joint venture that would offer cell phone service. Members of the informal group include Comcast, Time Warner, Cox Communications, Charter Communications, and Advance/Newhouse Communications. It is uncertain how these companies will proceed. Some insiders claim they will make a collective bid to acquire an established wireless carrier, bundling that carrier’s service with their cable TV and broadband offerings. Others claim these companies may collectively, or individually, launch wireless MVNO services, leasing network capacity from an established wireless carrier. Still others claim the companies may form a new company and launch an alternative form of mobile service using a new wireless technology like WiMax.
Cable companies have already taken market share away from traditional telecoms through the success of residential cable broadband service. Cable companies are now launching IP telephony service, taking aim at the dwindling long distance phone market. If cable companies can find a way into the wireless market, they will be able to offer the coveted triple play to the country’s 74 million cable TV subscribers.
Note, please, that there are three cable companies on that list that have customer bases in Louisiana: Cox, Charter and Time Warner.
The second paragraph explains the siege mentality that Bill Oliver and the boys from BellSouth seem to embody these days. Cable is taking broadband service from BellSouth. Cable IP telephony is taking aim at BellSouth’s core business (that would be the telephone business).
Now comes the wireless play! Golly Bob howdy, Verne! They’re threatening BellSouth at every turn!
Readers and BellSouth customers will recall that the company recently ponied up about $17 Billion for its 40 percent share of the cost of Cingular to buy AT&T’s customer base. A fair bit of that $17 Billion came in the form of new debt taken on by the company. This is not to say that Cingular or BellSouth are in any way troubled, but BellSouth is getting into something of a tight spot in Louisiana.
Time Warner has cable franchises in Monroe and Shreveport-Bossier (and probably points in between). Charter has franchises in St. Landry and Pointe Coupee but, more importantly, in the fast-growing, prosperous areas of St. Tammany and Tangipahoa parishes. Cox has the rest of south Louisiana, including Lafayette.
So, the question again must be raised: What in the hell is BellSouth doing partnering with Cox trying to defeat the LUS fiber to the premises project when Cox has its foot on BellSouth’s throat across the southern part of the state? And now comes word that Cox (among others) is about to jump into the cellular business! What kind of alliance is this?
Is this a case of BellSouth having misplaced priorities? Or, could it be that there was substance to the rumors of the meeting with Joey Durel last week? Reaching out to Lafayette and LUS makes a lot more sense from a strategic standpoint than any kind of sham alliance with Cox.
But, that’s just me!
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