Cable Will Increase Lead in Residential Bundled-Services Market, Study Concludes

Cable companies are outperforming telephone carriers by a widening margin in the battle for household wallet-share -- and that is likely to continue as both industries add advanced mobile features to their service bundles, market research provider Pike & Fischer has found in a new independent analysis.

Marketing alliances between telephone carriers and satellite video providers have failed to blunt cable's competitive edge, particularly as cable operators have rolled out digital phone service and begun wider discounting of so-called "triple-play" bundles of voice, video and high-speed Internet services, Pike & Fischer concludes in a new study. Both industries are now adding mobile services to those bundles, and cable may win that battle even though the telephone carriers already have their own mobile networks, the Silver Spring, MD-based company says.

Cable companies are adding mobile services to their bundles through a joint venture with Sprint. The Pike & Fischer report finds that cable companies will leverage their massive capital investments of the past decade and programming expertise derived from their core TV business to develop new "converged" services that include premium video content for cell phones and remote DVR programming.

"While the phone companies, which already provide mobile service, arguably have an early advantage in this arena, the alliance between Sprint and leading cable companies raises the specter of cable not only catching up in the integration of mobility, but even jumping ahead," said analyst Mitchell Shapiro, author of the report.

"Our research highlights why the big phone companies are now investing in network upgrades that allow them to deliver multi-channel video and converged services over their own networks," Shapiro says. "Taking this step will give them the technical capability to compete with cable's current and future service offerings, and allow them to retain video revenues rather than pass them onto their satellite partners. But these market-by-market upgrades will take time, and won't cover all of the RBOCs' territories. And there's no guarantee they will succeed financially, especially with the competitive wild card of web-based services looming over the telecom sector."

Pike & Fischer, a BNA company, offers a host of legal and business information products covering the telecommunications industry. "Bundled Services Strategies: a Competitive Analysis" is priced at $799 and can be purchased at www.broadbandadvisoryservices.com. For analyst commentary or an executive summary, contact Scott Sleek at 301-562-1530, x291 / ssleek@pf.com.

For more information about Pike & Fischer's Broadband Advisory Services, visit www.broadbandadvisoryservices.com or contact Jonathan Wentworth Ping at 212-576-8741 / jping@pf.com.