Is Sprint getting cold feet about Pivot and Xohm?
As another bad quarter bites
But merely putting the ship back on an even keel will not be enough to enable Sprint to fulfil its potential in the US market. Saleh's statements on the announcement of Q3 figures were predictable and hollow.
"We are operating with a renewed sense of urgency and are committed to take dramatic action to fix our business," he said, but with no idea of what those actions might be, and more than a hint that Sprint is actually backing away from the options that have the greatest dramatic potential.
Saleh admitted that Pivot, the $200m cable joint venture, which aims to offer a quad play offering nationwide, will not be expanded beyond its current base of 33 markets and 20 per cent of Sprint retail stores.
He said Pivot has suffered provisioning issues and, since Sprint is focusing on simplifying its business, it has decided not to expand Pivot. There have been predictable problems with integrating billing systems, but also the service has certainly not yet delivered on its vision of integrating TV, video and DVR functions across fixed and mobile platforms.
Although Saleh said the relationship with the cablecos remains strong, and they will work together on a future, simplified service for other markets, this sounds like the first nail in the coffin for a venture that held such promise of making Sprint into the key partner in a converged partnership that could be a realistic quad play alternative to the big two telcos – extending Sprint's successful MVNO model well beyond the realms of cellular voice and data.
It seemed likely at first that Pivot would also work on new spectrum and networks – something Sprint pulled back from when it exited a separate venture with its cable allies, SpectrumCo, which was set up to bid in auctions starting with last year's AWS. It was also probable that the venture would make use of the Xohm WiMAX network, since this could bring a powerful wireless element to the quad play and would benefit from the cablecos market reach – such an agreement would also take out potential conflicts of interest between Pivot and Xohm.
But for this to happen, the initial, relatively simple Pivot services had to be successful and well delivered, and this was not the case. In August, Forsee admitted Pivot's progress had been "disappointing" and it already seemed that the partners had fatally underestimated the complexity of, as he put it, "weaving the service into the cable fabric".
Fulfillment of the true quad play potential of Pivot also depended on the cablecos feeling sufficiently confident in Sprint's future networks to build a next generation strategy around them.