» Embarq: Wireline isn’t dead yet
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Embarq: Wireline isn’t dead yet
By Kevin Fitchard

Jun 17, 2008 9:00 AM

Embarq no longer has a wireless business, and it has no intention of pursuing IPTV. It’s even outsourcing network operations. But what Embarq does have — voice and DSL — is plenty for the carrier to work with to create a new generation of innovative applications, said Dennis Huber, senior vice president for corporate strategy and development for Embarq, at Insights for Next-Generation ILECs, a Telephony Live Event at NXTcomm.

The rest of the industry may consider wireline a dead-end, but Embarq is bucking the trend, Huber said at Monday’s Insights keynote address. By embracing convergence technologies and strategically linking its own services to other operators’ video and wireless platforms, Embarq is developing a portfolio that will restore value to the home phone line and lay the foundation for future revenue-generating services in the future, Huber said.

Exhibit No. 1 is Embarq’s eGo phone, launched in April. Using a cordless phone with full multimedia screen, the service enhances the home phone’s traditional dumb receiver, providing news alerts, directory services, visual voicemail, location-aware search and eventually text messaging. These types of services have been much ballyhooed in the SIP-based voice-over-IP (VoIP) networks of enterprises, but as Huber pointed out, there is no VoIP component to the service and no need for any SIP call control or IP router. The eGo simply shifts broadband services that normally would be available on the PC to the phone receiver.

Huber said the eGo is a perfect example of carriers being able to innovate with the resources that they already have rather than investing billions into new networks such as IPTV and wireless. The eGo services now are available to 83% of Embarq’s 6.2 million customers, who can buy the phone for $100 to $130 and additional extensions for $60, incurring no monthly service charge afterward.

“There are a lot of things we can’t do, but there are a lot of things we can do,” Huber said. “Convergence is the key. We just have to keep it simple.”

While a service that generates no recurring revenue may seem to back up the critiques of wireline’s naysayers, Huber said the benefits to Embarq are more indirect. A service such as eGo can provide the foundation for other revenue-generating services in the future, such as text messaging, ad-supported directory and search services, and eventually far more robust converged services in the future.

Here’s where Embarq’s pursuit of wireless and TV services without getting becoming a network operator is key, Huber said. Embarq announced plans to quit its mobile virtual network operator (MVNO) agreement with Sprint earlier last month, exiting what many consider the biggest growth business in telecom. Huber said that short of investing the billions in spectrum and infrastructure necessary to become a wireless operator, Embarq has no business being in the wireless business.

“It’s pretty tough in a competitive market — when everyone is offering unlimited this and unlimited that — if you don’t have owner economics,” he said.

What Embarq can do, Huber said, is link its value-added wireless services to the mobile phone. Embarq plans to offer a downloadable Java client that can be installed through a simple short message service (SMS) transaction. Said client could perform a number of functions, from synchronizing a customer’s home phone address book to enabling call-forwarding, unified voice and speech-to-text voice features between the home and mobile phones.

The same goes for video programming. Embarq is building out fiber-to-the-home in certain new markets, but it has no plans to get into the IPTV business, Huber said. Instead, Embarq is working with satellite TV partner Dish Network to develop set-top boxes that will support Embarq broadband and voice services to the TV screen.

“I call it the ultimate couch potato,” Huber said. “I’m sitting at home watching TV. The phone rings. I decide not to answer it, and it goes to voicemail. Soon, [the text of the] voicemail scrolls across the screen. That’s an example of convergence across the phone, the PC and the TV.”

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