Embarq announced the launch of virtual private networks (VPNs) utilizing multiprotocol label switching (MPLS). MPLS VPNs can be used to deliver virtually any type of network traffic. Embarq's new MPLS VPN service provides network management with in-network routing, offering security and service quality for multimedia streaming applications like Voice over IP and video. Embarq will offer multiple customer options ranging from a port-only offering to a “Fully Managed Solution Bundles” including unbundled ports, access, router and maintenance combinations. Embarq is coordinating the launch of this new service with the launch of their new brand Embarq Business, which will offer a variety of SMB and enterprise level communications solutions.

Embarq has decided that its wireless partnership with former corporate parent Sprint is no longer attractive. Embarq was hoping to gain 1 million wireless customers and has only achieved 112K to date. They've essentially decided to let the wireless business "die." They'll continue selling devices and plans until everything runs out, and then shut the business down. Existing wireless customers will probably migrate over to Sprint. The move isn’t an encouraging one for the MVNO model, at least as it applies to large carriers like Embarq. When hearing news like this, it’s easy to dismiss the MVNO model entirely, but I’m not ready to do that yet. It’s also bad news for Sprint, at least from a PR point of view. Embarq joins Qwest in ditching Sprint as a wireless partner. Sprint’s MVNO business has suffered highly visible partnership failures, including Qwest, Pivot Wireless, and now Embarq. To be fair, probably the most successful North American MVNO play, Virgin Mobile, is also affiliated with Sprint.

While the Sprint MVNO model hasn’t worked for Embarq, for many smaller ILEC’s, the MVNO model is the only game in town, provided a pure play ILEC wants to get in the wireless business. It’s a difficult business to crack. The ILEC partner, particularly small ones, are at the mercy of the larger wireless carriers, and are usually low on the totem poll in priority. Finding the right business model, where both wireline and wireless partner can prosper to their respective expectations has proven to be elusive. Yet, it’s still too early to give up. Wireline carriers recognize that the future of the business lies in wireless and broadband, not in wireline voice. Most ILECs have the broadband part covered. Those who want to also hedge their bets with wireless need to find an MVNO model that works. Early indications suggest that wireless can help maintain competitiveness. AT&T and Verizon are only beginning to maximize their competitive advantage with wireless, and their future looks promising. Recent news also suggests that the cable industry intends to find the right wireless strategy as well. So while MVNOs are taking a lot of heat of late, there could and should still be a positive future with them, provided those who are interested work to persevere and find a winning business model. Good luck!

Embarq announced the launch of eGo, which attempts to bridge the value of broadband service with the ubiquity of home telephone service. It's a continuation of a broad Embarq strategy to incrementally add value to traditional home telephone service, making it less vulnerable to being marginalized and replaced with wireless and/or VoIP alternatives. eGo phone handsets will sell online for $129.95 and in Embarq retail stores for $99.95. First reported by Light Reading, the new service provides access to data delivered via a broadband connection directly to a cordless home phone. Initially the service will provide visual voicemail, weather, yellow page directories, movie information, sports scores, and news headlines. The cordless phone has a "fourth screen" to display the information. Embarq hopes that customers will come to see eGo service as a resource to get information quickly, rather than retrieving that information from a laptop, TV, or home computer. Embarq also hopes those customers will then begin to see additional value for home phone service, and consequently be less likely to drop it for wireless only or VoIP service from a competitor. Verizon is looking at a similar strategy with their Verizon Hub service.

Embarq is seen as quite innovative in its pursuit of creating additional value for its core landline service. They are quite aggressive with applications like fixed mobile convergence and unified messaging, both of which make a landline more valuable. eGo is an extension of this strategy and aims to make Embarq landline services more appealing, and ultimately, more competitive.

Embarq and OnePartner announced a partnership to offer tier III data center connectivity. The data center will be connected with Embarq metro Ethernet circuits and will provide high-availability business continuance, disaster recovery and colocation services. Tier III data centers meet certain requirements defined by the Uptime Institute, including multiple active power and cooling distribution paths, redundant components, and is concurrently maintainable to ensure high availability.

Embarq announced the availability of a new online video store, available through their myembarq.com web portal. The broadband video on demand store will offer more than 5,000 movies, 5,000 music videos and 2,000 TV shows that can be rented on a pay-per-view basis, download to own, or downloaded to burn onto a DVD. The cost to rent titles on a pay-per-view basis is $1.99 to $3.99 each, and each title will be available for a single 24 hour viewing window within 30 days after rental. Purchase prices for new videos are expected to be for $19.99, with older titles for less. Embarq’s broadband video store is powered through Cinemanow. Embarq joins fellow independent telco, CenturyTel, with a recently launched Internet video product. Qwest has also stated they intend to pursue a broadband Internet strategy, and will forgo an IPTV powered subscription video model.

Embarq announced that they will become a reseller of HughesNet, a broadband satellite service of Hughes Network Systems. Embarq intends to target business customers with the broadband satellite service. They will offer download speeds ranging from 700 Kbps to 2Mbps and a price range of $59.99 per month to $179.99 per month. Embarq joins Wal-Mart who has also signed on to resell HughesNet. HughesNet competes mainly with WildBlue, a Colorado based satellite broadband provider. WildBlue has NRTC and AT&T as distribution partners.

Satellite broadband represents an interesting business. It targets rural areas that have limited to no broadband access. It’s priced somewhat higher than other broadband options, and generally includes significant equipment and installation costs (when compared with other broadband options). That might explain a recent report by SNL Kagan, featured in today’s Sky Report, which says satellite broadband is struggling somewhat. SNL Kagan reports that satellite broadband has only achieved a 6.2% penetration of the 10.8 million rural satellite broadband household footprint. That represents about 670K subscribers’ total. These numbers are relative though. If you talk to WildBlue, those somewhat low numbers have more to do with challenges of keeping up with demand than with a poor business model. WildBlue has had the unfortunate challenge in the past of having to selectively retard new subscriber acquisition, because their satellites (or certain "beams") have reached capacity, and simply can’t serve any new customers. It looks like they may now have some competitive company trying to meet that capacity challenge.

AT&T announced the launch of a 10Mbps DSL tier for U-verse customers. The new tier offers 1.5Mbps in upstream bandwidth, and is priced at $55 month. Embarq also recently announced a 10Mbps tier. Verizon regularly flexes its broadband muscle with FiOS, but also introduced a 7Mbps DSL tier recently. All this adds up to catch up time. DSL providers are transforming themselves from just a “value” alternative to more expensive and faster cable modem service. They are now trying to meet cable’s speed advantage head on. Cable has regularly tried to draw attention to their faster broadband speeds and have effectively labeled DSL as "slow" or the "new dial-up."

The battleground is now shifting away from speed comparisons to "value add" comparisons. As cable’s speed advantage wanes, both camps are now looking to provide value add services as a differentiating factor. For example, AT&T also announced that subscribers to their DSL service also gain access to AT&Ts 10,000 Wi-Fi hotspots at no additional charge. Both Verizon and AT&T are also adding convergence features for their broadband and video customers in an attempt to build value for bundled subscribers. Cable companies have their fair share of value add strategies as well, including free security suites and online gaming options. I suspect we’ll see the value add strategy intensify, and beyond the "usual suspect" value add features, expect telecom competitors to leverage their strength in wireless and cable to leverage their experience with video. Should be fun to watch.

Embarq has launched a 10Mbps DSL service across much of their footprint. The new service is priced at $64.95/month. According to Broadband Reports, Embarq also lowered some pricing for other DSL tiers to accommodate the high end 10Mbps service. Their 3Mbps/640kbps tier was lowered from $44.95 to $39.95, and their 5Mbps/758kbps tier was lowered from $54.95 to $49.95. Embarq is using ADSL 2+ technology for the faster speeds.

Dan Hesse is officially the man at Sprint Nextel, after resigning as CEO of Embarq to take on the huge challenge of righting the Sprint ship as their new CEO. Hesse is no stranger to Sprint, where he was appointed the CEO of Sprint’s wireline assets in 2005 prior to the Embarq spin off. Prior to Sprint/Embarq, Hesse spent over 20 years at AT&T and was CEO of AT&T’s wireless division from 1997-2000. He’ll need that wide ranging experience at Sprint, which has made numerous missteps since merging with Nextel. Hesse is also on the board of wireless giant Nokia. Hesse will have his work cut out for him.

Sprint is hemorrhaging subscribers and has many an investor nervous. Sprint is in such a weak position, it’s often thought of as a potential takeover target. There has been much speculation that cable giants like Comcast are eyeing Sprint as possible entrée into the wireless business. Sprint has formidable competitors in AT&T, Verizon, and T-Mobile, all of whom have been feeding on disgruntled Sprint subscribers. Many of those disgruntled subscribers are former Nextel customers, some of whom have expressed feeling like "second class" citizens at Sprint. Hesse will have many immediate strategic decisions to make, including what to do with Xohm, Sprint’s WiMAX effort. Hesse’s decisions on which direction to take Sprint will have serious competitive implications on the entire telecom landscape. This one will be interesting to watch.

Not everyone is comfortable getting naked. Add Embarq to that list. They offer a naked DSL product. They just don't want too many people to know. Telephony Online reports that Embarq offers a stand alone DSL product, but only as a retention tool. Landline customers who call Embarq to cancel their landline service are apparently being offered a stand alone DSL service. Embarq tells Telephony "…we would prefer to keep a customer for one service should they decide to discontinue their home phone service, rather than lose the customer altogether." Don't look for a marketing blitz from Embarq offering "nakedivity."

Today's reality is that all wireline companies are struggling with how to deal with line loss. AT&T also quietly offers a naked DSL product, although they were forced to in order to get their Bellsouth acquisition approved by regulators. It makes sense to leverage wirelines for whatever possible. If that means broadband only, so be it. Better than nothing. The issue that carriers like Embarq struggle with is what is the proper level of aggressiveness in offering that option. Competitors from wireless to cable have traditional telecom wirelines in their sights. Depending on your perspective, the happy or sad truth is that the future of wireline probably rests in IP/broadband, and not in voice. But voice still represents the lion's share of revenue for many wireline carriers today. Especially those who do not own significant wireless assets. No business, telecom carrier or otherwise, is interested in surrendering what regularly "butter's their bread." It's a struggle that wireline carriers will continue to face, as competitor's raid their core business, and they transition their wireline revenue structure from voice minutes to data kilobytes.