AT&T Inks Broadband VoIP Marketing Deals with MSOs
Comcast, Time Warner, Cox, Charter & Adelphia Sign CallVantage Pacts
OCTOBER 01, 2004
By Alan Breznick, Editor, Cable Datacom News
[...discussion re the way big cable is views its agreements with AT&T (CallVantage); and while it's likely Adelphia will be pieced out to other cable companies, if not Adelphia still plans a voIP deployment of its own ...; and CallAdvantage is a SIP service, not PacketCable]
North America's five biggest MSOs are teaming up with AT&T Corp. to promote cable modems to prospective customers for Ma Bell's new voice-over-Internet-Protocol (VoIP) service.
In the past month or so, Comcast Corp., Time Warner Cable, Cox Communications, Charter Communications and Adelphia Communications have all struck broadband marketing pacts with AT&T revolving around the phone company's rapidly growing CallVantage VoIP service. Seeking to spur broadband penetration in the U.S., AT&T will refer prospective CallVantage customers in each cable operator's territory to that MSO for high-speed data service.
"This is a great situation for us," an AT&T spokesman said. "Anything that helps drive broadband penetration will help AT&T CallVantage."
Although nobody's calling them exclusive deals, AT&T plans to treat each cable operator as a "preferred provider" in its service area. Plus, AT&T officials say they have no plans to pursue similar marketing deals with the regional Bells or other DSL providers.
"We're pretty much focused on the cable industry," the AT&T spokesman said. "It's a win for the cable industry because they can sign up more broadband customers." Indeed, thanks to the power of the AT&T brand, the CallVantage deals have the potential to drive perhaps tens of thousands of new broadband subscribers into each MSO's clutches, and away from the Baby Bells that are increasingly competing with Ma Bell in the long distance segment.
In another sign of AT&T's commitment to the cable industry, the company has licensed access to the valuable database of CableLabs' Go2Broadband service locator program. The agreement will enable AT&T to use the Internet-based electronic commerce tool to steer prospective CallVantage customers to the cable-modem providers in their service areas.
The cable-friendly moves come as AT&T, in competition with Vonage, several large MSOs and other VoIP pioneers, attempts to make an all-out assault on the emerging market for IP telephony services. The company, which has already spent $25 million on an intensive TV advertising campaign for CallVantage during the Summer Olympics, has set a goal of signing up 1 million consumer and business VoIP customers by the end of next year.
As part of that assault, AT&T has already rolled out CallVantage in 170 markets in 39 states and D.C., with more on the way. "We targeted the markets with the highest broadband penetration," another AT&T spokesman said. "We'll be expanding further.'
AT&T, which has not released CallVantage subscriber numbers yet, has also signed a deal with Best Buy to promote the VoIP service in the chain's 628 stores across the U.S. Plus, it's using a six-month introductory rate of $19.99 a month to plug the service.
"You get in the door with the price," said the first AT&T spokesman. "But it's the features that really keep them." The CallVantage features include unlimited local and long-distance calling, discount rates for international calls, call waiting, three-way calling, call forwarding, call logs, voice mail, personal conferencing and other services.
Under the pacts with the five big MSOs, cable operators will pay a price for the exclusive leads that AT&T generates. For one thing, cable operators will give the company a bounty for each new broadband customer that they manage to enlist.
Cable officials declined to disclose the per-subscriber fee. But they likened it to the fees that they pay consumer electronics chains and other retailers for similar service leads.
"AT&T is co-marketing Adelphia's HSI [high-speed Internet ] service," said Greg Ellenoff, director of voice product management for Adelphia. "We hope it will have a positive impact on sales in the HSI category."
In another interesting twist, cable operators have agreed not to plug their own VoIP offerings to consumers referred to them by AT&T. Instead, the MSOs will merely sign up the subscribers for high-speed service, allowing them to take advantage of CallVantage with their new broadband connections.
"When they come to us and sign up for Road Runner, we don't pitch Digital Phone," said a Time Warner Cable spokesman. "It's pretty straight forward."
Of course, as one cable source pointed out, that doesn't mean that cable operators can't pitch their own VoIP services to the CallVantage prospects somewhere down the line. Once consumers start receiving cable-modem service, the source said, they become fair game for cross-selling other products. "We can go back later," he noted.
But the subject is clearly touchy to cable executives because their own VoIP services compete, or will compete, against AT&T's service. They make a point of stressing that they won't be promoting CallVantage to their customers, just signing up CallVantage prospects as broadband subscribers.
"Adelphia is not marketing CallVantage to its customers," Ellenoff said. "AT&T didn't ask us to and it's not part of the scope of our agreement."
Nor will the five big cable operators provide any quality-of-service (QoS) guarantees or other benefits to CallVantage subscribers on their broadband lines. Even MSOs like Adelphia that haven't launched their own IP telephony offerings yet don't want to provide any possible competitive edge to AT&T.
"We don't want to compete against our own prospective service," said Ellenoff, whose company intends to launch its own VoIP product early next year if it remains independent. "It would be a different kind of offering than CallVantage."
As a result, cable executives are definitely downplaying the CallVantage deals. In fact, only one of the five big MSOs, Adelphia, has even made an official announcement about the new broadband marketing arrangement with AT&T.
"Some people seem to think it's a partnership with a big P," Ellenoff said. "But it's not that big a relationship. It's smaller than that." |
