It Wasn't So Pivotal After All
Operators Plot Next Mobile Move
By Todd Spangler -- Multichannel News, 4/26/2008 6:35:00 AM
Cable-system operators may have missed the call for mobile communications services with their short-lived $200 million wireless venture with Sprint Nextel. After little more than two years ramping up, Comcast, Time Warner Cable and Cox Communications last week decided to stop selling the Pivot mobile-phone service, operated by Sprint.
But individual operators are already scoping out the next phase of their wireless strategies.
Comcast, Time Warner Cable and Cox said they would offer their Pivot customers the option of switching to a Sprint mobile plan. The fourth cable partner in the joint venture, privately held Advance/Newhouse Communications, declined to comment.
Through the joint venture with Sprint, cable operators touted the addition of a fourth pillar in the multiservice bundle.
“The initial phase will allow us to offer wireless phones as part of our bundle, and that’s nice,” Comcast chairman and CEO Brian Roberts said the day after the deal was announced in November 2005. Eventually, the multiple-system operators expected mobile phones to be a platform for upselling video.
There was even the idea that customers would be able to access programming on their cable companies’ digital video recorders from their Pivot mobile phone — Slingbox-style — although that never got off the drawing board and would have involved negotiating with programmers for the rights to do this.
None of the parties had disclosed how many Pivot subscribers had signed up, although the service was promoted by cable operators in 33 markets before the rollout was halted last fall.
Pivot was dead on arrival for one basic reason, according to analysts: Nobody wanted a me-too product that, compared with Sprint’s own services, provided no price break or compelling unique features.
“There may be several good reasons that this organization did not succeed, but one is truly conspicuous: consumers voted with their wallets,” Advanced Media Ventures Group managing director Shelly Palmer wrote in a report last week.
According to Sprint and the cable operators, the product proved cumbersome to integrate, market and, ultimately, tough to sell.
But cable operators say they plan to eventually deliver mobile services. “We want to offer our customers mobility — stay tuned,” Cox director of media relations David Grabert said.
Grabert pointed to the operator’s successful bid in the recent government 700-Megahertz wireless-spectrum auction. The company paid $305 million for 12 MHz of spectrum licenses covering approximately 76% of Cox’s footprint.
“We are committed to evolving our existing bundle of services through product convergence and mobility so that our customers can easily enjoy Cox services both inside and outside their homes,” Cox senior vice president of strategy and product management Dallas Clement said in a statement.
Both Comcast and Time Warner Cable have said they were exploring options regarding wireless, outside the realm of the Pivot joint venture.
And the four Pivot cable companies are also sitting on 137 Advanced Wireless Spectrum licenses, which they acquired as SpectrumCo for $2.4 billion in 2006. Sprint sold its 5% interest in SpectrumCo in 2007.
Comcast last week confirmed it hired Dave Williams, chief technology officer of Telefonica’s O2 Europe wireless division and previously vice president of strategic planning at Cingular Wireless. He joined Comcast about a month ago, as senior vice president of wireless technology strategy.
Meanwhile, rumors continued to percolate that cable operators and Sprint continued discussions about forming a new venture, to fund the nationwide buildout of a WiMax wireless broadband network. The WiMax joint venture talks “were not affected by anything that happens with Pivot,” Reuters reported, citing an anonymous source.
Mike Reynolds and Kent Gibbons contributed to this report.
