Friday, December 23, 2005

Convergence Theme Prevalent in Today's Telecom Marketplace

There has been a lot written lately about convergence and the "quad play", which combines video, telephony, broadband internet and wireless into single package. Technology News writes about this in relation to the recent partnership between Sprint and Comcast , Time Warner Cable, Cox Communications and Advance/Newhouse Communications. Michael Paxtonat In-Stat said, "The cable companies have been talking about getting into the wireless market for about three years and now think that they have a business model that makes sense for them."

The article looks at the various factors coming together to make this convergence apossibility. One reason is "simpler billing." As Bob Egan at The Tower Group mention from his own personal experience after switching his home telecom and cable television services to a bundled system, "The bundle cut my monthly communications charges by about 20 percent."

On the recent Sprint/Cable consortium, Jeff Kagan said, "Cable companies wanted to get into the wireless space but the other major network providers are already affiliated with wired telecommunications services providers, while Sprint is independent."

In-Stat's Paxton said, "The cable companies are in trail mode now and should have their wireless services operating by the end of 2006." Kagan added, "Sprint has been moving more into the wholesale side of the wireless market and the agreements mean at the very least, more traffic will flow over its network."

Paxton pointed out that "Right now, cable companies have about 4 million telecommunications customers, which is a significant base, but there are 115 million telecommunications users in the U.S."

Paxton noted that the battle between "telecommunications and cable companies to broaden their services ranges has begun, and the latter seems to have jumped out to an early lead." He said, "Because they do not have to put all of the network infrastructure in place, the cable companies should be able to roll out wireless services faster than the telcos can deliver video services."