Triple play!

SBC and Qwest last week announced separate deals with satellite television providers to add video services to their voice and data bundles, a key step in competing with cable companies to offer “triple play” services.

SBC and Qwest last week announced separate deals with satellite television providers to add video services to their voice and data bundles, a key step in competing with cable companies to offer “triple play” services.

SBC and EchoStar Communications have entered into a $500 million exclusive partnership that allows SBC to add television services to its bundled voice and data offerings. Early next year, SBC says it will market EchoStar’s Dish satellite TV service as the “SBC Dish Network” to the 13-state in-region customers of its bundled services. The two companies are now working on integrating operations, including order entry, customer service and billing, the RBOC says.

SBC is funding development of the co-branded video services with $500 million in the form of convertible debt.

The alliance fulfills a long-term strategic objective of SBC’s to integrate television entertainment into its consumer bundles and does so with a “modest” investment, according to the carrier. Earlier this year, SBC considered acquiring EchoStar competitor DirectTV, a unit of General Motors’ Hughes Electronics business, for a reported $10 billion.

The deal provides SBC with the video component of a triple play – voice, data and video – service bundle with which to compete against cable companies that are offering voice and data, and taking some telephony and broadband Internet access line business away from the RBOCs. Analysts believe the SBC/EchoStar alliance will prompt cable companies to become more aggressive on telephony services.

Longer term, the companies also will work together to develop technology that combines the functionality necessary to receive Dish Network satellite television, DSL Internet and home networking, as well as more convenient ways to receive SBC Dish Network bundled services, SBC says. These efforts may produce a set-top box that integrates satellite TV, DSL Internet access, and home LAN and wireless LAN capabilities, and serves as a foundation platform for next-generation services, SBC and EchoStar officials say.

Qwest, meanwhile, has announced marketing arrangements with EchoStar and DirecTV. Qwest customers can order local, long distance, wireless, DSL and now TV service with a single phone. TV service billing and customer support, however, will still be handled by EchoStar and DirecTV, though Qwest says a more integrated bundle of these capabilities is a future goal of these marketing arrangements.

Qwest will make EchoStar’s Dish Network satellite TV services available to its customers in single-family homes in Colorado and Nebraska. DirecTV will be offered to customers in single-family homes in Phoenix and Tucson, Ariz., and Seattle.

In addition, DirecTV will be the exclusive digital satellite TV provider for multiple dwelling unit properties in those territories where Qwest provides video programming services.

The EchoStar and DirecTV services will be rolled out in these and other markets this year and next. Qwest says it currently offers multichannel video to approximately 64,000 customers through very high-speed DSL, satellite and hybrid fiber-coaxial cable media.

The industry now awaits disclosure of the video bundling strategies of the other two RBOCs, BellSouth and Verizon. BellSouth said in an earnings call last week that it is considering its options, and that an arrangement like the deal SBC has with EchoStar may be desirable.

Verizon did not respond by press time.