CENTURYTEL BACK IN WIRELESS WITH VIRTUAL OPERATOR PLAY

After a two-year hiatus, CenturyTel is back in the wireless business, pursuing the mobile virtual network operator business model that is gaining popularity among wireline operators without wireless assets.

CenturyTel said last week that it will resell Cingular Wireless voice service. The decision essentially was made to keep a promise to offer a mobile option in its bundle, without having to take on the responsibilities of owning a network. The company isn't a national carrier — and its primary concern isn't its wireless business — but operating and maintaining a full-fledged carrier business is an end unto itself, said Karen Puckett, chief operating officer at CenturyTel.

“It's a tough business to go into,” Puckett said. “Not only do you have to have distribution stores and maintain a network, but you have to have scale and scope. You have to go national, and you have to go after every customer segment. We don't want to go after every segment. We want to focus on the ones that are important to our ILEC business.”

For CenturyTel, that segment would be families — the main demographic of the scattered rural markets that make up its national footprint. Unlike the other wireline companies launching MVNOs, CenturyTel is offering its wireless service strictly as part of its local voice bundle. Even though CenturyTel is considering alternate uses for the wireless service, they all relate back to its wireline product set. For instance, the company could sell wireless and DSL without public network voice to college students. “If they have wireless and a cable modem, we lose that customer entirely,” Puckett said.

In addition to a new deal with EchoStar to resell its DISH programming service, CenturyTel is using Cingular's wireless minutes to bulk up its bundle, offering a full package of voice. It's a strategy that many wireline carriers are adopting as they face the omnipresent threat of cable competition, said Patrick Zerbib, vice president and wireless analyst at Adventis. Whether CenturyTel will be successful at leveraging its bigger bundle into more customer wins and reduced churn will depend on how well it integrates the services into its back office, Zerbib said.

“In some cases, carriers haven't even integrated billing of all of their services,” Zerbib said. “That's a poor bundle in my mind. It essentially comes down to a marketing agreement, and there's still no incentive for a customer to stay with the local telco.”

Puckett, however, said integration wouldn't be a problem. Not only is CenturyTel providing a single bill for its bundle, it's now investigating ways to integrate wireless directly with its wireline and data services. The carrier is testing an Internet portal that will allow users to manage their wireline and wireless services simultaneously, along with exploring some advanced convergence features like a single phone number for home and handset as well as shared long-distance minutes between wireless and landline connections. CenturyTel is even looking into unified messaging solutions that will meld its DSL services into wireless.

“The discussions we've had with various partners have been very encouraging,” Puckett said. “The hard part of this is the back office and the actual execution of the service.”

Reborn as an MVNO

AT&T — After shedding AT&T Wireless through a spinoff, AT&T is getting back into the wireless game with a deal with Sprint. While it has yet to launch the service, AT&T plans go further than just a separate wireless offer. It plans to integrate its wireless service with its VoIP technology.

Qwest — Qwest gave up on its ailing wireless network last year, opting instead to let Sprint run the network service for it. Qwest officially kicked off the service in May and began phasing its old network, migrating its existing customers to the new MVNO.

CenturyTel — CenturyTel sold a wireless network that barely overlapped its ILEC territory in 2002, vowing to get back into the wireless biz when the time was right. That time is apparently now as CenturyTel bulks up its bundle with a resale agreement with Cingular and a DBS video programming deal with EchoStar.

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