Multiplay Contrarian

Talk to many telco strategists today and their line of reasoning will go something like this: Traditional voice service is dying; the only way to survive is to invest in wireless and advanced video services such as IPTV.

But while that logic may make sense for AT&T and Verizon, at least one smaller telco isn't buying it. Embarq, the distant No. 4 player in the telecom market, has given up on offering wireless service. Addressing attendees at Telephony's Insights for Next-Generation ILECs conference last month, Dennis Huber, senior vice president of corporate strategy and development for Embarq, said, “It's difficult to offer unlimited wireless plans when you don't have owner's economics.” And as for IPTV, he added, “That's not a path we're going to be heading down.” Because of density issues, he said, “We struggle with making it work.”

But if this sounds like a carrier putting its head in the sand, it's anything but. Huber offered what could be a guiding principle for nearly all Independent telcos when he quoted former UCLA basketball coach John Wooden: “Do not let what you can't do interfere with what you can do.”

Recently, Embarq has launched a flurry of initiatives that take a different tack toward addressing the issues of today's telecom market. For example, the company's eGo phone launched in April challenges the notion that erosion of voice service is a foregone conclusion.

While big telcos have begun to use the adjective “three-screen” to describe an integrated strategy for video, data and wireless, Huber described the eGo phone as a “whole new fourth screen.” The product, which sells for $130 for the first phone and $60 for each additional phone, includes a 2.5 cm screen that serves a variety of functions. Through an interface with a broadband connection, it can provide local weather, sports and directory services, eliminating the need to wait for a computer to boot up; it can store an address book; and it can provide a visual list of voicemails, enabling users to click on messages to hear them in a preferred order.

There is no monthly charge associated with eGo. Instead, the goal is to reduce churn by offering end users a reason to keep their landline service — and in the future, there may be an opportunity for Embarq to make money through ad-supported directory or search services. Huber declined to reveal take rates, but Embarq clearly appears committed to the offering. The company already is planning future enhancements, such as the ability to send text messages or to support different user profiles for different family members.