Mediacom Picks Sprint for VoIP

8/29/2004 8:00 PM Eastern

Mediacom Communications is now the third cable company to align with Sprint Corp. for voice-over-Internet protocol telephony, starting next year.

Sprint, which also has VoIP deals with Time Warner Cable and USA Cos., will provide soft switches and media gateways, while Mediacom will handle the marketing — and might add Sprint-based wireless telephony later.

“We believe the Sprint PCS service allows us to bring wireless into our bundle for the quadruple play,” said Mediacom executive vice president of operations John Pascarelli.

Mediacom will sell telephony service separately, not requiring customers to buy its Mediacom Online high-speed Internet service first.

“Our bundle is going to be very competitive,” Pascarelli said. “We believe we will have phone and data subscribers [and] we believe we’ll have phone-only customers.”

Mediacom passes about 2.7 million homes in 23 states. (The company has about 1.5 million customers.)

The MSO serves many smaller cable markets, where a call to a location 10 or 20 miles from the home might be a toll call. VoIP crosses such borders at no extra charge. “That’s a huge competitive advantage for us,” Pascarelli said.

Sprint will assist Mediacom in provisioning, switching, terminating traffic to the public telephone network, delivering 911 emergency service, with local-number portability and with operator and directory services.

Mediacom hasn’t picked a phone-modem vendor yet.

Customers will have their choice of battery or backup power.

Pascarelli said pricing decisions haven’t been made yet but the service will feature caller ID, call waiting, call forwarding, voice mail and unlimited long-distance service in the U.S.

Cable companies have generally been charging $35 to $40 per month for unlimited calling, and some (notably Cablevision Systems Corp.) have experimented with discounts for multiple-service customers.

Pascarelli said the cable customers Mediacom is now losing to direct-broadcast satellite rivals are price-conscious, and VoIP can help win them back.

The average phone customer spends $55 to $60 a month on phone service. Combine that with a low-end satellite package and the cost rises to $80 to $90 a month for video and phone. “When you take our bundle, the pricing advantage for DBS will disappear.”

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