Friday, April 01, 2005

Time Warner Cable begins cell phone trials | CNET

Time Warner Cable begins cell phone trials CNET

The "baby bells" are welcome to MCI and AT&T. FON is making the smart move.

The above report from CNET says that TWX is testing what is called MVNO service. The idea is powerful. There are already too many cell phone companies, TWX certainly does not want to spend the money required to muscle into this business. On the other hand, TWX is naturally getting into the VoIP phone business. Again, why not? TWX already has the cable into the homes. Not offering phone service would be the equivalent of not allowing Ford cars on Chevrolet roads and vice versus.

Earlier this week, I wrote about the convergence of VoIP and WiFi--it is going to happen. Where does this all lead? As an independent, Sprint (FON, NXTL) needs muscle to compete with VZ and SBC (BLS, Cingular). TWX has the customers and Sprint has the cell phone network begging for customers. TWX customers who sign up for TWX cellular will be on the Spring network but they will hardly know it. All they will know is that TWX can offer them a better deal for cell service on a package deal.

ESPN, Disney, Virgin Wireless and many others will partner with Sprint to expand the network. When the convergence of WiFi and VoIP begins, FON customers will have many access points available for unlimited "free" calling. Billions are being spent upgrading networks. There is a big up-grade cycle in the works. Investors should ignore the crazy ups and downs of the recent market and climb on board. The market is acting like the Ken Fisher bucking bronco of old so climb on an enjoy the wild ride.