Las Vegas Business Press :: News : Embarq arranges phone marriage, hopes for bliss

Embarq arranges phone marriage, hopes for bliss

Company sees market for bundled services

BY VALERIE MILLER

The rice has been swept away from the Valentine's Day wedding of Embarq's wireless and land-line phones but company officials are hoping the honeymoon for their newest venture won't be over anytime soon.

Life-size phones symbolically tied the knot on Feb. 14, at the Little White Wedding Chapel in Las Vegas. "This was the culmination of a lot of things we were talking about," said Embarq Consumer Markets President Harry Campbell, who gave the "bride" (a sleek, pink, wireless phone) away. "From a planning standpoint, it is new and creative."

The corporate marriage of the two products should be wedded bliss, Campbell maintained. Embarq, which became its own public company in May after spinning off from Sprint Nextel, is offering the two phone services for prices starting at $75 a month. That includes 350 cellular minutes and unlimited home-phone, long-distance access around the clock. For another $10, customers can double those wireless minutes.

Jeferson Applegate | Business Press
Former "Newlywed Game" host Bob Eubanks officiates at the mock wedding of a cellular phone and a land-line one, symbolic of Embarq's merger of its wireless and conventional telephone services.

Embarq is not trying to compete with the Cingulars and Sprint Nextels of the industry, the exec cautioned: "Our market isn't enamored with our (wireless) prices. You would more likely go to another provider."

"We have a different strategy," Campbell said. "We believe that there is a huge portion of the market that values the home phone and we believe the home phone meets their needs," Campbell offered. Embarq started offering wireless phones in June.

Of Embarq's 43,000 wireless subscribers, Campbell estimates 90 percent have home phones as well. That market may be limited by age. The Embarq prexy doesn't deny that land-line use had declined dramatically among those under 30. "There is a younger segment of the market that is wireless-centric," he allowed.

The vast majority of Americans still have home phones, he noted, putting that number at around 80 percent. Campbell took heart in Embarq's fourth-quarter results, despite an overall decline for 2006. The last three months of the year saw the provider's earnings increase by $1.28 a share, to $194 million. That was up from $155 million in the year-ago period.

The late surge was the silver lining in an otherwise-weak earnings performance. Embarq's year-over-year earnings fell by $6 million in 2006, to $784 million.

Campbell sees the phones' nuptials as a promising union for the Sprint Nextel spin-off. "Research has shown that people are using a third of their minutes at home," he explained, "and if they had a reliable home phone, they would use it."

Embarq has 4 million land-line subscribers and is growing its high-speed Internet customers, Campbell added. "Our goal (for wireless) is like our high-speed Internet. We expect a large percentage of our revenue to come from wireless phones."

vmiller@lvbusinesspress.com | 702-871-6780, x331

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