Sprint Nextel, Comcast, Time Warner Cable, Cox Communications and Advance/Newhouse Communications to Form Landmark Cable and Wireless Joint Venture
NEW YORK--(BUSINESS WIRE)--Nov. 2, 2005--
Tens of Millions Nationwide to Have Access to the "Quadruple Play" Integrating Video, Voice, Internet and Wireless Capabilities
Sprint Nextel Corporation (NYSE:S), Comcast Corporation (Nasdaq:CMCSA, CMCSK), Time Warner Cable -- a unit of Time Warner Inc. (NYSE:TWX), Cox Communications and Advance/Newhouse Communications today announced they will form a joint venture that will accelerate the convergence of video entertainment, wireline and wireless data and communications products and services to the approximately 41 million customers currently served by four of the country's largest cable companies as well as to Sprint's nearly 46 million wireless subscribers. The venture has the potential to serve approximately 75 million homes currently passed by the cable companies.
The companies in the joint venture will work to develop converged next generation products for consumers that combine the best of cable's core products and interactive features with the vast potential of wireless technology to deliver services anywhere, any time. Leveraging the expertise, technical leadership and customer focus of Sprint and four of the largest, most successful cable and broadband communications companies will provide millions of customers access to the most advanced integrated entertainment, communications and wireless products available anywhere in the United States.
Terms of the Agreement
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.