Since launching its wholesale voice service for cable, Sprint Wholesale has enjoyed a steady stream of ongoing revenue from major cable MSOs, but now the division will be taking a major revenue hit as a Bernstein Research note confirmed that Time Warner Cable is phasing out their voice outsourcing agreement with the carrier.
A report written by Craig Moffett of Bernstein Research revealed that the contract with Time Warner Cable "equates to about $5 per subscriber per month in unadjusted earnings, or about $249 million a year."
Time Warner Cable spokesman Justin Venech said that while the company has decided to bring its voice operations `in-house,` he would not confirm the exact date when this transition will be completed or what TWC pays Sprint for this service. "It improves our economics, but it will take several years to complete," said in a Kansas City Business Journal article.
Sprint, meanwhile said that the phase out of the Time Warner Cable would not affect its 2010 financial performance.
Interestingly, Moffet`s report appears just as Sprint looks to be on a rebound. After Sprint`s CFO Bob Brust said that the company could see revenue growth later this year, company shares rose nine percent to $3.62 on Tuesday.
