Sprint Nextel's Watershed Deal

A couple of more articles on Sprint's joint venture with four of the largest U.S. cable companies -- Comcast, Cox, Time Warner Cable and Advance/Newhouse Communications -- which together serve some 41 million cable customers. The deal will allow the cable companies to sell Sprint's wireless service along with their own TV, phone-calling, and high-speed Internet access.

In a BusinessWeek article, Roger Entner at Ovum estimated that "currently, 30% to 50% of consumers would be interested in a service package that includes TV, high-speed Internet access, phone service, and wireless. Yet only about 5% have actually signed up for one with a telecom provider."

The article stated the problem is that the cable companies have not made it easy for consumers to add wireless services to their current bundle. "Carriers haven't put that much effort into [making the experience pleasant]," said Entner.

According to venture consultancy i2 Partners, "The number of U.S. wireless subscribers affiliated with cable companies may rise to 1.5 million by 2008, vs. 800,000 at the end of next year." With 197 million wireless users currently in the U.S., Michael King at Gartner predicted that "fewer than 5% of the total may migrate to cable in the next 2-3 years."

Over at the Houston Chronicle, independent telecom analyst Jeff Kagan said, "Both the telephone companies and the cable industry are gearing up to go to battle with each other."

Julie Ask at JupiterResearch added, "At the end of the day, most people still just want to talk on their cell phone. There are very few people who want to download music or do these types of broadband-type activities."

Ask noted that consumers choose their wireless carriers in different ways. She said, "The way people make decisions about cell phones is still about cheap minutes, good coverage at home and a free handset."