Bit Rate

Why Pivot Was DOA

4/23/2008 9:53 PM

Talk about an expensive lesson learned. The $200 million investment in Pivot has been reduced to a slide deck of "things cable won’t do the next time it enters the wireless market." (See Cable Operators Pivot Away.)

When Sprint, Comcast, Cox, Time Warner Cable and Bright House announced their JV in November 2005, cable’s wireless play was supposed to (1) first be a fourth pillar in the multiservice bundle and (2) later provide the "third screen" for video content.

“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

Eventually, the MSOs expected mobile phones to be a platform for upselling video: It was "the idea of another set of applications that people will pay a small premium for,” as Roberts told investors at the time.

There was even the idea that customers would be able to access programming on their cable DVRs from their Pivot mobile phone, Slingbox-style – now, that would have been a real standout feature, if the operators could have finagled the rights.

But Pivot was DOA for one basic reason: Nobody wanted it. 

As Multichannel News and others have pointed out, the service was slow to get off the ground. The MSOs and Sprint blamed a complex service provisioning process for many of the problems. As priced and packaged, though, Pivot wasn’t ever going to really fly.

1. It wasn’t less expensive than Sprint’s own service. A consumer expectation of the triple-play is getting a price break, if even just temporarily. Not so with Pivot. In fact, Comcast was charging $33 per month for 200 anytime minutes, whereas Sprint’s standard pricing for a 200-minute package was $29.99.

2. It didn’t have any truly compelling features. The MSOs had real trouble trying to find ways to integrate the mobile service into the triple play. The features touted as providing "value" to cable customers were: unlimited calling between wireless phones and cable-provided landline phones; the ability to access home voice mail from mobile phone; and other features, like the ability to view TV listings on a mobile phone. Not enough to ring the register.

What’s next? Cable’s wireless version 2.0 may already be in the works.

Reuters reports that the MSOs’ discussions with Sprint to create a WiMax JV are still on: "A source close to one of the companies said the WiMax joint venture talks were not affected by anything that happens with Pivot." 

GigaOm hears that Comcast has hired O2 CTO Dave Williams, formerly of Cingular, to be SVP of wireless and technology strategy to “explore wireless options” for the operator.

Then there was the AP story last November, citing anonymous sources, that the four Pivot MSOs were seeking to hire “telecom industry experts” in what appears to be steps to develop their own mobile services. 

At least the cable operators know what not to do this time.

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