mocoNews - Sprint And The Cable Companies "Have A Common Enemy"
Sprint (NYSE: S) CEO Dan Hesse explained to The Wall Street Journal that one of the ways he intends on turning around Sprint is by partnering with others to resell their wireless services, or through wholesale relationships, like it has with the Amazon (NSDQ: AMZN) Kindle. Hesse: "(Wholesale) is an important contributor to revenue now, and will be an important contributor for some time. We'll get the lion's share of new products that need a cellular connection." Sprint's reseller business includes a partnership with the cable operators, which are allowed to offer their customers Sprint's 3G voice services and 4G broadband access through Clearwire (NSDQ: CLWR), in which Sprint owns a 51 percent stake. And, why are the cable companies interested in working with Sprint? "We have a common enemy," Hesse said. They are Verizon (NYSE: VZ) and AT&T (NYSE: T), which are increasingly threatening the cable operators by rolling out TV and Internet services to the home. Hesse: "That's why Sprint and the cable companies are such logical partners."
The wholesale model will also figure heavily into Clearwire, as other companies buy and resell WiMax services, Hesse said. Of course, Verizon and AT&T are also counting growth from the wholesale business as more connected consumer electronics, like laptops, MP3 players, cameras and even cars, to increase revenues. But it can be argued that Sprint has the most experience with the model since it has been the most aggressive to form wholesale relationships with MVNOs, like the one it has with Virgin Mobile (NYSE: VM) USA.
