Cable Companies Vulnerable?

There are some very smart people in the telecom business who are betting on the cable companies as the winners in the service provider wars. Their logic goes something like this. The cable companies have relationships with content providers and have faster broadband connectivity and are taking away voice market share from the LECs. The phone companies aren’t even able to deliver TV yet.

There is some sound logic here. The LECs are behind and if they don’t catch up soon they can be in trouble over time.

The one ace up the sleeve of the phone companies is their relationships with businesses which are better than the cable companies. The cable companies have good products for enterprise customers but this hasn’t been a focus for them until recently.

Where the cable companies need help is in the wireless space and as the world goes wireless – and it is – AT&T, Verizon and others have a big advantage over the cable companies.

Of course no cable company is unaware of this situation and these organizations have been partnering with Sprint and other wireless companies as a way to offer wireless services to their customers. Many are partnering with Sprint in fact.

So while round one may have gone to the cable companies it seems round two may go to the phone companies as they own the wireless networks. According to the USA Today in fact AT&T is confidently telling the world about how Disney and Viacom are clamoring to get at the 60 million Cingular customers.

"Wireless is at the top of our list," says Scott Helbing, AT&T executive vice president of entertainment, who is responsible for acquiring programming content for AT&T’s new video service, called U-verse. Helbing continued, "When we go back five years from now" to negotiated deals with TV programmers, "it’s going to be a totally different conversation."

The question as to whether people want to watch video on a small screen is a good one. I believe they do. I have made comments to the contrary in the past and others have told me they are thrilled watching TV on a small screen.

In addition expect virtual reality type goggles allowing HDTV+ quality video to become more popular.

I am really looking forward to seeing how mobile video works out in the real world and I can’t wait to get a pair of those glasses.

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