Sprint, Cable Firms Form Partnership

Sprint Nextel Corp. and four big cable companies joined forces Wednesday to provide customers with video, phone, Internet and wireless services in a deal that further blurs the line between cable and phone companies.

The 20-year arrangement delivers what backers call the quadruple play of information services and sets the stage for big battles with phone giants that are preparing to add video programming to their own rapidly growing complement of products.

Sprint would split the $200-million investment with the cable companies: Comcast Corp., Time Warner Cable, Cox Communications Inc. and Advance/Newhouse Communications Inc. The deal gives the cable operators access to Sprint’s network and allows them to sell wireless services to customers.

Analysts say the partnership presages the day when cable and phone companies compete head to head for the same customers. It also underscores the growing dependence between the technology and entertainment industries as new gadgetry enables people to slice and dice their media any way they want it.

Mobile phones play music and video, as do devices such as Sony Corp.’s PlayStation Portable and Apple Computer Inc.’s iPod. One of the new products to be rolled out, for instance, would allow Sprint cellphone users to set their digital video recorders or see downloaded programs on their cellphones.

“It’s truly marrying the fixed line and the wireless for voice and video,” said Weston Henderek, an analyst for research firm Current Analysis Inc.

Although the partnership deal is significant, “probably five years from now, it will be much more significant,” said Mike Paxton, an analyst for technology research firm In-Stat. “For competition, it turns up the heat on the phone companies, but not a huge amount because they’ve been talking about doing this for years.”

Architects of the deal said it would allow customers to take programming with them wherever they went.

“What this is about is being able to extend the consumer experience beyond the home,” Comcast Chairman Brian Roberts said.

For instance, the group said it planned to sell high-speed cellular handsets that could stream video, make Internet calls and collect voice mails in a single in-box.

“The examples given [Wednesday] were to jazz up the agreement,” analyst Paxton said. “But they’re so far in the future that it’s certainly something consumers won’t see in the next 12 months. They’re probably five years away.”

Many management and technological challenges remain.

Although the Sprint partnership with the cable firms is a joint venture, no new company will be formed. Instead, an undetermined number of executives from each company will form a governance council to guide managers and determine how to spend the $200-million investment. Engineers from each firm will work collaboratively to solve the technical challenges.

Sprint will have one vote and all the cable companies, including others that may join the venture, will have a single vote, said Sprint spokesman Scott Stoffel.

In the meantime, phone companies such as SBC Communications Inc. are pursuing their own plans.

SBC, California’s dominant phone company, said the venture was “really no surprise.” SBC spokesman Steven Smith said, “We are already doing what the cable companies are just starting to scratch the surface on.”

One SBC product, for example, would let customers of its majority-owned Cingular Wireless put the cellphone into a cradle attached to home phones, turning cellular calls into conventional land-line calls at home.

The Sprint-cable partnership deal positions the cable industry to challenge SBC and other phone companies in the market serving small and medium-size businesses.

“So many businesses want that quadruple play,” said analyst Steve Hilton at Yankee Group, a research firm.

But with similar offerings eventually, Paxton said, the pitch will be the same.

“This is really a convenience and pricing play from the consumer perspective,” he said. “If you’re getting all the services, it’s more convenient to get it billed from one provider -- and hopefully get it at a discount.”