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Cable Companies Preparing Cell Phone Entry

November 3, 2005
Just as Verizon and SBC are completing their acquisitions of MCI and AT&T, a consortium of giant cable companies are getting into the wireless business, adding a new competitive element to the telco-cable wars.

A consortium of cable companies, including Comcast, Time Warner and Cox, say they'll sell cellphone service that uses Sprint's wireless network.

But the cable companies won't simply be reselling cellular service. They're devising a suite of cutting-edge features, like seamlessly linking a customer's cell phone to his high-speed Internet wireless service, providing rock solid in-house reception, something that's often sadly lacking with traditional cell phones.

The cable companies are also hoping to tightly integrate the cell phones with set-top boxes, allowing customers to download TV programs and music to their cell phones and perhaps enabling them to control their digital-video recorder through their cell phone.

Details of the new service are still being worked out and it's not expected to be available until next year. It will most likely carry both Sprint's brand and that of the local cable company.

Cable's expansion into wireless opens a new front in the battle for market share, as both cable and telephone companies add elements that were previously missing from their product mix.

Telephone companies have until recently controlled nearly all of the wireless market while cable companies have had the video business largely to themselves. Cable has been gaining on the telcos in the high-speed Internet race, currently controlling about 60 percent of the cable circuits to U.S. homes.

The telcos are racing to provide video, and are doing so at tremendous cost. Verizon leads the way in re-wiring American neighborhoods to provide blazing fast fiber-optic video over lines that will also accommodate Internet and telephone traffic.

Cable companies have been steadily stealing local telephone customers from the Bell companies but until now have not had a wireless product.

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