Verizon Wireless-Cable Partnership Won’t Wait for Spectrum Sale Approval
The technology joint venture, marketing and strategic partnerships between Verizon Wireless and the SpectrumCo members will proceed immediately, while the companies pursue regulatory approval of their proposed $3.6 billion spectrum deal (CD Dec 5 p5), cable executives said Monday at a UBS conference in New York. “The commercial agreements … are very separate from the spectrum sale,” said Comcast Vice Chairman Michael Angelakis. “Those agreements are in place and the teams are meeting,” he said.
Sign up for a free preview to unlock the rest of this article
Communications Daily is required reading for senior executives at top telecom corporations, law firms, lobbying organizations, associations and government agencies (including the FCC). Join them today!
Comcast plans to begin marketing Verizon Wireless products in four markets at the beginning of 2012, said Comcast Cable President Neil Smit. “The teams are already engaged, and we think we can put together great packages that combine the best of the various bundles,” he said. And the companies are experimenting with different combinations of products to bundle together and market to customers, Smit said. “It doesn’t have to be a quad-play,” he said. Any combination of Comcast’s wireline services with Verizon Wireless products could be presented, he said.
The deal achieves Comcast’s financial and strategic goals for the AWS spectrum it bought at auction in 2006, providing a healthy return on its investment while providing a clear wireless strategy for the future, Angelakis said. That strategy even drew praise from people at Sprint, the wireless company that has traditionally been the cable sector’s wireless partner, Angelakis said. “There’s some recognition that we're setting a bit of a different strategy, and they understand it from a business perspective,” he said.
The partnerships will align “the best wireless company in the U.S. with what we think is the best wireline company in the U.S.,” said Time Warner Cable Chief Financial Officer Irene Esteves. TWC is planning to immediately begin marketing Verizon Wireless products and expects Verizon Wireless to begin marketing TWC services soon as well, she said. “Introducing each other’s products to a new customer base is terrific,” she said. Echoing Comcast’s executives, Esteves touted the partnership’s potential to allow TWC to strategically deploy its AWS spectrum without having to make a major investment to build a wireless network. “It’s fulfilling what we've said strategically is the most important thing for us,” she said.
That Verizon Wireless will also sell cable products is a major component of the deal and boon to Comcast, Angelakis said. Prior discussions with wireless partners always involved cable operators marketing wireless products, without the reciprocal marketing included in this deal, he said. “They'll take our services and bundle it with their service, and put it through their [sales] channels, which is a different channel mix than we usually have,” he said.
Another major benefit to the cable operators is the wholesale, virtual network operator arrangement, Smit said. That agreement never expires and will incorporate future Verizon Wireless products, he said. It’s too soon to say exactly what new products the companies will develop as they work to more closely integrate wireless and wireline services, Esteves said: “The joint venture is just a sparkle in our eye at this point, but we are very excited about the potential.”