January 4, 2007 4:02 AM PST
Forget the triple play--wireless ups the ante
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But that could change in 2007. Verizon and Verizon Wireless, which is jointly owned by Verizon Communications and European carrier Vodafone, are queued up for a big announcement at this year's Consumer Electronics Show, which begins this weekend in Las Vegas. Some believe the companies may announce plans to integrate video services from Verizon's Fios TV service with Verizon Wireless's V Cast service that delivers video. A Verizon representative confirmed a scheduled press conference, but declined to comment on the nature of the announcement.
AT&T is also gearing up to do more with its wireless service. Now that the megamerger with BellSouth has cleared the final regulatory hurdle, the companies will soon close a deal valued at roughly $86 billion. In addition to creating the largest phone company in the country, the marriage with BellSouth also gives AT&T complete control over Cingular Wireless, the largest mobile phone operator in the country.
AT&T has already stated publicly that it plans to sell the AT&T-branded wireless services in packages to its corporate phone and Internet customers. The company will also package wireless with its other services for consumers.
But Sprint and the cable companies still believe they have a leg up on the competition.
"Clearly AT&T, with its full possession of Cingular, will have some advantages in how easily they can integrate certain services," Sprint-Nextel's Garcia said. "But the advantage we have is that our partners have been in the video business for a very long time, whereas AT&T is just starting."
Indeed, AT&T and Verizon have been moving relatively slowly in their deployment of TV services compared with how quickly the cable operators have been able to penetrate the telephony market. AT&T is only just now starting to offer its service in 11 markets. And in those markets, the deployment is still very controlled.
"In principal, AT&T with its IPTV service should be able to deliver video over different mediums," said analyst Penhune. "But realistically, the technology is still new. And they are probably more concerned with getting it to work and scale before they can think about integrating video with wireless services."
Even Verizon, which is using technology similar to that of traditional cable cable networks to deliver Fios TV, is nowhere near reaching the penetration rates of the cable industry. The company said in 2006 that it planned to have more than 175,000 subscribers signed up for the service by the end of the year.
While new quadruple play services may be introduced in 2007, it's unlikely that consumers will see huge discounts from either cable operators or phone companies. For example, Comcast, which is piloting the service in Boston and Portland, Maine, is offering the basic wireless service for $33 a month when customers buy it as part of a package that also includes broadband, voice and TV service. (Each of these services also starts at $33 a month.)
The basic wireless service offers 200 minutes, 300 SMS text messages, free long-distance calling and voice mail access, Comcast's Tom Nagel said. But at $33 a month, it's not much cheaper than existing wireless services. What is more, in order to get access to the more advanced integrated features such as access to Comcast's e-mail client or the TV guide, users have to pay an additional $15 a month for a data package. And if consumers pay $25 a month, they can get Internet access with e-mail and access to the TV guide, as well as access to certain video content.
Verizon's wireless/home phone package, called Verizon Complete Freedom, is also pricey. In Texas, the service starts at $99.94 a month for both home and wireless services, according to the press release. Even though Fios TV is not integrated into the service, Verizon will sell it as part of a package. The press release indicates that customers can get wireline calling, wireless, Internet and entertainment video services for as little as $160.92 per month. The bundle includes either Verizon Online DSL or Verizon Fios Internet service, where available, and either DirecTV satellite service or Fios TV, where available.