COMMUNICATIONS Phone giants partner with cable television

SBC will begin offering satellite TV to customers early next year.
DALLAS (AP) -- In hopes of staving off competition from cable companies, two of the nation's regional phone giants announced Monday partnerships with satellite TV providers that will widen the package of services that can be offered on a single bill.
SBC Communications Inc., the main local phone company in much of the Midwest, Southwest and California, announced a partnership with EchoStar Communications Corp., provider of the Dish Network, to offer a cobranded service to homes in SBC's 13-state service area. San Antonio-based SBC also agreed to invest $500 million in EchoStar.
Separately, Denver-based Qwest Communications International Inc., the main local phone provider in 14 Western and Plains states, announced its own partnerships Monday with EchoStar and rival DirecTV Inc.
"We're a major step closer to providing customers with a true one-stop shopping experience -- one bill, one number to call and one Web site to visit for all of their communications and programming needs," said Richard Notebaert, Qwest's chairman and chief executive.
Cable competition
Like other phone companies, SBC and Qwest have been hurt by a decline in local lines and tough competition from cable companies, which have two-thirds of the market for broadband Internet service and already provide phone service to 3 million households.
Rick Black, senior telecom analyst at Blaylock & amp; Partners, had a different view. He said the nation's two other local phone giants, Verizon Communications Inc. and BellSouth Corp., might not need to offer video because they already have strong bundles of services, with wireless calling and long-distance service throughout their local territories.
Still, independent telecom analyst Jeff Kagan said bundling services is more profitable for the Bells than giving a customer a single service.
"Not only that, but when customers use multiple services, it becomes increasingly difficult to compare and contrast to competitive offerings so they tend to stay put," he said.
SBC and EchoStar will integrate operations, including order entry, customer service and billing, so they can begin offering the product early next year. SBC executives promised that customers who subscribe to a package of services that include TV will get "significant value," but they declined to discuss any specific discounts.
Equal footing
Edward Whitacre Jr., chairman and CEO of SBC, said the partnership will put SBC on equal footing with cable companies, which are experimenting with Internet-based calling technologies that could greatly expand their voice services. SBC offers long-distance service in most of its markets and provides cellular service through Cingular Wireless, a joint venture with BellSouth.
Charles Ergen, chairman and CEO of Littleton, Colo.-based EchoStar, said the venture's success "will boil down to execution and making sure we can put these products out to consumers in a seamless manner."