SureWest leaves ‘vicious’ wireless business to third parties

Providers of quadruple-play services need not own the wireless part of the bundle, Steve Oldham, president and chief executive officer of SureWest Communications, said this week.

Speaking at an investor conference late Wednesday, Oldham said that revelation--a reversal of Surewest’s philosophy--led the company to sell its wireless business to Verizon Wireless two weeks ago.

“We no longer think the wireless product itself has to be in your total owned suite of products,” Oldham said.

SureWest sold its wireless business—including the spectrum rights, storefronts and more than 50,000 customers—to Verizon for $69 million, using the money to help fund its recent acquisition of Kansas City cable overbuilder Everest Broadband for $173 million.

“We used to think we had to own [the wireless business],” Oldham said. “We no longer think that. Turning that into cash and using that cash to build out the network and acquire additional assets like Everest was clearly the right decision for us.”

Oldham would prefer to resell other operators’ wireless services, arguing that third-party providers are incentivized to adopt that model as well. “For example, Verizon doesn’t serve landline in Northern California,” he said. “AT&T is the primary company besides ourselves. So if Verizon has a wireless product that dovetails with landline products, they have every reason to want it to dovetail with our landline products too. We think we’re going to have the availability of the convergence of wireless and landline because there are a lot of wireless providers who do not own landline networks where we serve, and they’re going to want to take those customers too for the wireless product.”

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