Major MSOs Cautious on Mobile Service Launches

MSOs are taking care rolling out the new Pivot-branded service nationwide, executives said last week at the Society of Cable Telecommunications Engineers (SCTE) annual Cable-Tec Expo conference here. Advance/Newhouse Communications, the smallest of the four MSOs in the Sprint-Cable Joint Venture, still is testing the service and has not yet deployed Pivot commercially in a single market. “We're getting ready to put the product out in one market,” said Bob Miron, chairman & CEO of Advance/Newhouse. “But we're not ready to announce it.”

Unlike Advance/Newhouse, Cox Communications so far has introduced Pivot in four markets, with at least two launches planned for the second half of 2007. But Cox President Pat Esser said his company is moving quite slowly and carefully with wireless. “We're probably slow-go on this because we don’t want to mess up the customer relationship,” he said.

In his panel talk, Esser cited key challenges to rolling out wireless services and putting all customer charges on one bill. Headaches include “service integration and marketing integration” of cable and wireless products, plus “product integration issues” between cable services and mobile phones. He also noted “swivel-chair issues,” as when cable customer service agents must switch from one management screen to another to sign up Pivot subscribers. “We still have product integration issues we're working through,” he said. “You don’t just get in the business in 24 hours.”

Operating even more cautiously than Cox, Comcast has launched wireless service in only two pilot markets, Boston and Portland, Ore. Plans reportedly call for Comcast to extend Pivot’s reach to as many as eight more markets by the end of the year, but the nation’s largest MSO so far has focused on working out bugs in Boston. “We're learning what consumers would like to see in a mobile product,” said John Schanz, executive vice president of national engineering and technical operations for Comcast. He said the MSO has filled orders for “several thousand phones” in its two initial markets.

Time Warner Cable, the most aggressive of Sprint’s four cable partners, so far has introduced mobile service in six markets. Plans call for adding two more markets by the end of June and, by year-end, most if not all of the rest of the MSO’s two dozen or so regions. But, as Comcast has, Time Warner Cable has enlisted only a few thousand mobile clients in its initial markets, CTO Mike LaJoie said.

In another sign of cable industry caution, other large MSOs continue to mull joining the Sprint-Cable joint venture, more than a year and a half after Comcast, Time Warner, Cox and Advance/Newhouse formed the grand consortium with Sprint. At the Cable-Tec Expo show here, for example, Suddenlink Communications CTO Terry Cordova said his company will explore joining the Sprint venture only later this year, once it has rolled out VOIP throughout its territories later.

Separately, senior cable executives pooh-poohed notions that mobile TV might emerge as a powerful competitive threat to cable’s core video business. Miron said mobile video can’t compete with cable, since a small cell phone screen never can match full-blown TV. “I don’t think taking video with you on the phone is any competition to what we do,” he said. “It’s an adjunct.”

Cable officials questioned the capacity of such new products and services as Slingbox and Joost to compete with cable, challenging their scalability and economic viability. The cable executives especially doubt Joost’s competitive strength. Noting that none of these new services “make much money now,” Bob Zitter, CTO and executive vice president of technology at HBO, advised audience members not to “devalue today’s products.”