Sprint Nextel Corporation (NYSE: S), Comcast Corporation (Nasdaq: CMCSA, CMCSK), Time Warner Cable -- a unit of Time Warner Inc. (NYSE: TWX), Cox Communications and Advance/Newhouse Communications today announced they will form a joint venture that will accelerate the convergence of video entertainment, wireline and wireless data and communications products and services to the approximately 41 million customers currently served by four of the country's largest cable companies as well as to Sprint's nearly 46 million wireless subscribers. The venture has the potential to serve approximately 75 million homes currently passed by the cable companies.
The companies in the joint venture will work to develop converged next generation products for consumers that combine the best of cable's core products and interactive features with the vast potential of wireless technology to deliver services anywhere, any time. Leveraging the expertise, technical leadership and customer focus of Sprint and four of the largest, most successful cable and broadband communications companies will provide millions of customers access to the most advanced integrated entertainment, communications and wireless products available anywhere in the United States.
Terms of the Agreement
The joint venture, which is mutually exclusive for three years and has a 20-year term, calls for a combined initial financial commitment of $200 million, $100 million of which will be committed by Sprint and $100 million of which will be committed collectively by the cable companies. The investment is expected to be used to fund the development of the converged services, national marketing initiatives and back office integration. The companies contemplate additional participation from other cable companies.
Beginning in 2006, the companies in the joint venture plan to:
Offer consumers access to the expanded four element bundle, or "Quadruple Play," or any combination of services including video, wireless voice and data services, high speed Internet and cable phone service
Serve growing consumer demand for a wireless "third screen" beyond the TV and computer screens
Develop and introduce new co-branded wireless devices that will provide new and unique features that integrate cable and wireless services all on a single device
Sell and market these co-branded products and services to customers through a combination of 1,600 Sprint retail stores, cable retail outlets and other third-party distributors, including thousands of RadioShack stores
Unlike MVNO (mobile virtual network operator) or other wholesale relationships, the companies participating in this joint venture will retain full economic benefits of the acquired customers, similar to what they currently enjoy through their direct retail channels.
Next generation wireless products and services
The next generation wireless phone will be designed to connect customers of Comcast, Time Warner Cable, Cox and Advance/Newhouse Communications to Sprint through Sprint's nationwide high-speed Power Vision(TM) EV-DO (Evolution Data Optimized) network and integrate products from each cable company. Customers using the converged services will be able to seamlessly interface between email, home and mobile voicemail, Digital Video Recorders (DVRs) and photo programs. An interactive demonstration of these capabilities and services can be found at http://188.8.131.52/. The parties plan to implement and sell Power Vision(TM) EV-DO-enabled handsets and service packages that will enable customers to:
Use interactive features like remotely programming their home DVRs
Have a single voice mailbox that serves both the home and the wireless phone
Access innovative new calling plans which allow for unlimited calls between the home and the wireless device
Surf the Internet using their cable Internet portal
Send and receive e-mail from their cable high-speed Internet account
Access unique content like streaming television programming, music, video clips, games and pre-recorded DVR programs
In addition, the five companies have agreed to work together to explore potential next generation wireless technology business plans for new services that could be provided using Sprint's Broadband Radio Spectrum (2.5 GHz), with the goal of further integrating wireline and wireless services. This spectrum has the capability to provide high-speed data connectivity that can help deliver an even wider and richer array of entertainment and communications services.
In each market, the price of the integrated offering will be agreed to by Sprint and the cable company serving that market. Each cable company will be responsible for billing customers and for customer service in its territory for the converged offering. Customers can enjoy the convenience of a single bill for all of their services, including video, data, phone and wireless.
Gary Forsee, president and CEO of Sprint Nextel said, "The new Sprint- cable partnerships will forever transform what used to be merely a cell phone into an indispensable third screen in customers' lives. By giving consumers more access to information, entertainment and data from their cell phone, we will create more loyal customers, and we'll further drive our growth. With the convergence of technologies and capabilities accelerating, we will create personalized content, useful innovative applications and easy-to-understand navigation required by consumers. Together with our cable partners, we will have the unique content and distribution assets to realize this opportunity."
Brian Roberts, chairman and CEO of Comcast Corporation said, "This agreement, which represents the most expansive technological convergence of its kind, will deliver to our customers an unprecedented level of real-time, high-speed mobility and access to content all in a single package. We have always believed cable provided the best available entertainment and communications experience, and by teaming up with other leaders of our industry, we will now take that competitive advantage to the next level. Together with Sprint Nextel, we look forward to developing fully integrated products that give our customers an even better entertainment experience whether they are in the home or on the move."
"We believe this joint venture is the right way for cable operators like Time Warner Cable to fully engage in the wireless business in the most customer-friendly and least capital intensive manner," said Glenn Britt, chairman and chief executive officer of Time Warner Cable. "This is really about much more than adding a fourth element to our existing video, data and telephone bundle. It is about developing a wireless platform that connects all of our services for the customer both inside their home and when they are on the road."
Jim Robbins, president and CEO of Cox Communications said, "This revolutionary partnership will forever change the way Americans consume entertainment, communicate and exchange information. With more than 3 million Cox customers already choosing to bundle at least two services, and more than 1 million bundling cable TV, high-speed Internet and telephony, our company has been realizing the benefits of bundling for some time now. We look forward to further increasing our customers' satisfaction by adding new wireless services, increased integration and portability."
Robert Miron, chairman and CEO of Advance/Newhouse Communications said, "We welcome this opportunity to join our partner Time Warner Cable, as well as Comcast and Cox, in this very worthwhile initiative, which will enable us to offer our customers a wireless addition to our product line of digital cable, high speed data services and digital phone, and future cutting edge innovations to be developed by the venture."
Media Luncheon and Product Demonstration
The CEOs of Sprint Nextel, Comcast, Time Warner Cable, Cox Communications and Advance/Newhouse Communications will hold a luncheon for the media and product demonstration today at 1:00 p.m. ET in the Le Trianon room on the second floor of the Hotel Plaza Athenee, located at 37 East 64th Street in New York City.
Reporters who cannot attend may call into a teleconference to listen to the event and ask questions. U.S. reporters should call (866) 297-4539 and international reporters should call (706) 679-9046. The conference call ID number is 2067146. A replay of the call will begin at 5:00 p.m. today and will be available for 24 hours. To access the replay, please call (800) 642- 1687 or (706) 645-9291 and input the conference call ID number 2067146. The conference call will also be webcast and can be accessed at http://www.videonewswire.com/event.asp?id=31227. The interactive demonstration of these capabilities and service can be found at http://184.108.40.206/.
Comcast Corporation (Nasdaq: CMCSA, CMCSK) (http://www.comcast.com) is the nation's leading provider of cable, entertainment and communications products and services. With 21.4 million cable customers, 7.7 million high-speed Internet customers, and 1.2 million voice customers, Comcast is principally involved in the development, management and operation of broadband cable networks and in the delivery of programming content.
The Company's content networks and investments include E! Entertainment Television, Style Network, The Golf Channel, OLN, G4, AZN Television, PBS KIDS Sprout, TV One and four regional Comcast SportsNets. The Company also has a majority ownership in Comcast-Spectacor, whose major holdings include the Philadelphia Flyers NHL hockey team, the Philadelphia 76ers NBA basketball team and two large multipurpose arenas in Philadelphia. Comcast Class A common stock and Class A Special common stock trade on The NASDAQ Stock Market under the symbols CMCSA and CMCSK, respectively.
About Cox Communications
Cox Communications, a Fortune 500 company, is a multi-service broadband communications company with approximately 6.7 million total customers, including 6.4 million basic cable subscribers. The nation's third-largest cable television provider, Cox offers both analog cable television under the Cox Cable brand as well as advanced digital video service under the Cox Digital Cable brand. Cox provides an array of other communications and entertainment services, including local and long distance telephone under the Cox Digital Telephone brand; high-speed Internet access under the Cox High Speed Internet brand; and commercial voice and data services via Cox Business Services. Local cable advertising, promotional opportunities and production services are sold under the Cox Media brand. Cox is an investor in programming networks including Discovery Channel. More information about Cox Communications can be accessed on the Internet at http://www.cox.com.
About Sprint Nextel
Sprint Nextel offers a comprehensive range of wireless and wireline communications services to consumer, business and government customers. Sprint Nextel is widely recognized for developing, engineering and deploying innovative technologies, including two robust wireless networks offering industry leading mobile data services; instant national and international walkie-talkie capabilities; and an award-winning and global Tier 1 Internet backbone. For more information, visit http://www.sprint.com/mr.
About Time Warner Cable
Time Warner Cable owns and manages cable systems serving subscribers in 27 states, which include some of the most technologically advanced, best- clustered cable systems in the country with more than 75% of the Company's customers in systems of 300,000 subscribers or more. Utilizing a fully upgraded advanced cable network and a steadfast commitment to providing consumers with choice, value and quality customer care, Time Warner Cable is an industry leader in delivering advanced products and services such as video on demand, high definition television, digital video recorders, high-speed data, wireless home networking and Digital Phone. Time Warner Cable is a subsidiary of Time Warner Inc.
About Advance/Newhouse Communications
Advance/Newhouse Communications manages Bright House Networks which serves more than two million customers in several large markets that include Tampa Bay and Central Florida (Orlando), Indianapolis, Birmingham, Bakersfield and Detroit, along with several other smaller systems in Alabama and the Florida Panhandle. Bright House Networks offers its customers a wide range of cable television services including Video on Demand, high speed data and Digital Phone services. For more information, visit http://www.mybrighthouse.com.
This news release includes "forward-looking statements" within the meaning of the securities laws. The statements in this news release regarding the business outlook, expected performance, as well as other statements that are not historical facts, are forward-looking statements. The words "estimate," "project," "forecast," "intend," "expect," "believe," "target," "providing guidance" and similar expressions are intended to identify forward-looking statements. Forward-looking statements are estimates and projections reflecting management's judgment and involve a number of risks and uncertainties that could cause actual results to differ materially from those suggested by the forward-looking statements. With respect to these forward- looking statements, management has made assumptions regarding, among other things, customer and network usage, customer growth and retention, pricing, operating costs, the timing of various events and the economic environment. Future performance cannot be ensured. Actual results may differ materially from those in the forward-looking statements. Some factors that could cause actual results to differ include:
with respect to Sprint Nextel, the uncertainties related to its contemplated spin-off of our local telecommunications business;
the effects of vigorous competition and the overall demand for the services offered by the parties in the agreement as well as the converged service offerings described in this release;
the costs and business risks associated with providing new services and entering new markets;
the effects of mergers and consolidations in the communications and cable industries and unexpected announcements or developments from others in the communications and cable industries;
the uncertainties related to investments in networks, systems, and other businesses;
the uncertainties related to the implementation of business strategies (including those described above) the impact of new, emerging and competing technologies;
unexpected results of litigation pending or filed against the parties included in this release;
the costs of compliance with regulatory mandates;
the risk of equipment failure, natural disasters, terrorist acts, or other breaches of network or information technology security;
the risk that third parties are unable to perform to requirements under agreements related to our business operations or that the parties described in this release are unable to finalize definitive agreements surrounding the contemplated activities (including, but not limited to, the distribution relationship with RadioShack);
the possibility of being impacted by changes in political or other factors such as monetary policy, legal and regulatory changes or other external factors over which the parties have no control; and
other risks referenced from time to time in each of the party's filings with the Securities and Exchange Commission (SEC).
The parties believe these forward-looking statements are reasonable; however, you should not place undue reliance on forward-looking statements, which are based on current expectations and speak only as of the date of this release. No party is obligated to publicly release any revisions to forward-looking statements to reflect events after the date of this release. The parties regularly disclose in their respective public SEC filings a detailed discussion of risk factors including their respective 2004 Form 10-Ks as amended, and you are encouraged to review these filings.