When it comes to seeing what's the next big thing for cell phones, the picture can be a bit blurry.
But hindsight, as they say, is 20/20.
First, it was sending text messages. Then it was downloading ringtones. Then it was taking photographs. Then it was listening to MP3s.
Then, just a few weeks ago, it was watching television -- and in many ways, it still is.
It's just that now, Sprint Nextel Corp. has added a new wrinkle. And what that wrinkle means for consumers in Indianapolis and across the United States is just starting to emerge.
This month, the carrier announced an alliance with four cable TV companies, including Advance/Newhouse Communications Inc., parent of local provider Bright House Networks.
The companies, starting in 2006, will deliver their own voice services through Sprint Nextel on co-branded phones. Indianapolis consumers, for instance, would have Sprint Nextel phone that also have Bright House logos on them.
In return, the cable companies are expected to increase the number of live television channels and recorded video clips available on Sprint Nextel cell phones, as well as tailor them to specific markets. If there's a high school football game on television, next year consumers may be able to watch it on their cell phones.
And all of that video will cross Sprint Nextel's new higher- capacity network. That means the images -- especially live television -- will be smoother than what currently is available.
"How do you best leverage what the cable companies already do really well? Make it wireless," said Arthur Orduna, vice president of strategic initiatives for Advance/Newhouse Communications.
"Video has been a core product of ours since day one," added Buz Nesbit, president of Bright House Networks' Indianapolis division.
So far, consumers have tuned in rather slowly to television on cell phones. It's mostly a niche market for now.
Only 1 percent of Americans with cell phones watched video on them in September, according to M:Metrics, a market research firm that specializes in mobile content and applications. MobiTV Inc., a third-party company that puts most of that video on cellular networks, says it has signed up about 500,000 subscribers.
Still, those who do tune in do so regularly.
Nearly 30 percent of the 1.6 million subscribers who watched video clips in September did it at least once a week, and 51 percent of the 1.4 million subscribers who watched streaming video did it multiple times that month.
For those numbers to grow further, carriers must deploy higher-capacity networks, introduce more video-capable cell phones and create a broader range of video content, analysts say.
"The challenge for the industry now becomes one of raising consumer awareness of mobile video and ensuring that programming is packaged and priced in a compelling way," said M:Metrics senior analyst Mark Donovan.
Those are all things that Sprint Nextel's alliance with Advance/Newhouse, Comcast Corp., Time Warner Inc. and Cox Communications Inc. is expected to do.
"We see our customers upgrade their (cell phone) handsets every one or two years," said Kevin Gleason, Indiana's vice president of consumer solutions for Sprint Nextel. "There's so many customers that don't understand what they can get. Customers, once they see it, it's something they want to take advantage of."
Here, or coming soon
Right now, two of the big three U.S. carriers offer live television. But both Sprint Nextel and Cingular Wireless do so over their lower-capacity networks, meaning the video is rather choppy. Sprint Nextel's higher-capacity network is rolling out now, and Cingular's will early next year.
That meshes with predictions about the mobile television market.
British research firm Informa Telecoms and Media predicts that in just five years, there will be more users of broadcast mobile TV worldwide -- 124.8 million -- than there are U.S. TV homes (110 million). And according to M:Metrics, 6.1 million American consumers said they were likely to watch recorded video or live TV on their cell phones in 2006.
"The fact that more people intend to watch mobile video than the number who are downloading games today is very encouraging for this market," Donovan said.
But for consumers in Indianapolis and elsewhere, much of what they will get out of the Sprint Nextel deal will revolve around convergence, analysts say.
More to offer
A slew of services will emerge, combining landline and wireless phone, cable and Internet services.
Examples include the ability to program your home cable box to record a television show from a cell phone and calling plans that combine landline and cell services for unlimited use.
"The biggest impact will be on the consumer who will suddenly learn that bundled services mean more than discounts. They mean a range of new communications and entertainment choices," wrote analyst Charles S. Golvin in a report for Forrester Research Inc.
What these services will cost will vary by market, and Bright House hasn't cited any yet.
The price structure, like the technology that will support these novel services, will be developing over the next few months.
"We're gonna build the mousetrap, but the cheese had better be good," Orduna said.
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