With Sprint Nextel rumored to be in talks with three large cable companies Comcast Corp., Cox Communications and Time Warner Inc. to resell advanced wireless services through those entities, industry analysts say that would be a move in Sprint Nextels favor.
The recently merged Sprint Nextel now has the necessary spectrum to develop a WiMAX network across much of the United States, which means the company could offer high-speed wireless services that compete with wireline broadband.
Sprint Nextel spokespeople will not comment on the anticipated deals. Sprint executives have said they want the company to expand beyond its current VoIP agreements with cable companies. The Wall Street Journal this week reported the cable companies would share a new high-speed wireless broadband network that could use WiMAX; Sprint is testing is the new network now.
“Sprint, as No. 3 player is yearning for wider distribution,” says Al Boschulte, chairman of Probe Financial Associates Inc. “Help from the cable companies is an obvious plus for them.”
The Wall Street Journal said the resale agreement calls for the companies to distribute Sprint service under the Sprint brand, while other news reports noted the services would be sold under the respective companies labels.
[T]he situation for the cable companies is more complex,” Boschulte adds. They’re counting on getting a huge payoff from a rival voice product, namely VoIP. How they price wireless low enough to attract a meaningful number of subscribers and not undercut their own VoIP requires some tricky dance steps on their part, to say the least.”
Time Warner already resells Sprints PCS service in the Kansas City area.