Sprint’s Cable VoIP Woes: Symptom of a Greater Trend?

March 17th, 2010 by · 4 Comments

The wireline division of Sprint Nextel (NYSE:S, news, filings) has certainly had a rough spell lately.  Last week it emerged that its long time VoIP customer TW Cable was bringing the business in house, and this week its smaller brethren Mediacom followed suit.  Both had outsourced much of the infrastructure for their cable VoIP offerings to Sprint since the beginning of the VoIP surge back in 2003-2004.  Is this specific to Sprint or is it a trend across the sector?  

Perhaps it is.  When these contracts were won, it was a time when Cable companies were not particularly comfortable with voice services, or any telecom services really.  That has clearly changed across the board.  Sprint has taken the brunt of it because they won the biggest, most publicized cable VoIP outsourcings, but effects of the MSO’s increasing confidence are more widespread than that.

As discussed by xChange Magazine recently, the cable MSOs are a rising challenge to CLECs on several fronts.  Whether it is Cox Business’s Ethernet push, or Comcast’s purchases of Cimco and NGT, or those 3800 lit buildings of Cablevision’s Optimum Lightpath division – the whole group is clearly on the march.  Is it any surprise then that they would have less need of a fully outsourced VoIP solution from Sprint?  No, that seems like little more than an inevitable side effect.

This is not to say that the Cables have no need at all to buy from wholesale VoIP providers, it’s just that they are getting more sophisticated in self providing where it makes sense.  Sprint will surely not see these revenues go to zero.  But we can also be pretty sure that the days of such large comprehensive VoIP deals are waning.  Anyone for VoIP al a carte?

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Categories: Cable · CLEC · VoIP

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4 Comments So Far

  • The_highwayman says:

    Rob, HFC networks are far less reliable than many think, while the MSO do pose a threat to the CLEC, facility based providers(fiber biggots) will not be as imapcted…

    again HFC networks are not true fiber based networks, at least in my mind….

    • Rob Powell says:

      You’re right, the challenge from cable has its limits. However, outside of the consumer segment they seem to be getting more fiber in their diets too.

  • Notrom says:

    For those who are fans of LVLT , it should be noted that LVLT has no interest in small business rev & in fact disposed of 100 mil in small business rev that it acquired[ through acquisitions] & did not wan’t . I believe they define small business as someone who spends less than 3000 per month re bandwidth services .
    I suspect that small business is the primary success area for the cables . They are geared to handle that kind of business, whereas an LVLT is not interested in that area .

  • Rob Powell says:

    Corrected – 3800 lit buildings now for Optimum Lightpath, not 3500.

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