With the advent of VoIP, cable companies have started making a foray into the telecom marketplace by offering bundles of voice, video and data services (constituting the so-called "triple play"). In competing against the RBOCs, the MSOs have one compelling advantage (video), but also one potential Achilles' heel: the possibility of a "quad play" with wireless services. Hence, it was not surprising to see yesterday's story on IT Manager's Journal that the cablecos are considering launching a joint cell phone venture.

According to some insider information from the Wall Street Journal, the US largest MSOs have been discussing the possible formation of a joint venture geared towards offering cell phone service.  The informal consortium includes cablecos such as Advance/Newhouse Communications, Comcast (Nasdaq:CMCSA), Charter Communications (Nasdaq:CHTR), Cox Communications (NYSE:COX) and Time Warner (NYSE:TWX).

The idea of such a JV for these large MSOs has been floating around for quite sometime, but there have been rumors that the talks to carry out this plan have heated up in the past few weeks, with the cablecos interviewing investment banks to act as advisors for a potential deal. 

One alternative is the outright acquisition of an existing cellular operator.  Another more likely option would be to use the cellular network of an established wireless operator, reselling the service under a separate brand.  Virgin Mobile uses such an arrangement in the US (with Sprint PCS) and Canada (with Bell Mobility).  Ditto for Qwest, which also uses Sprint's PCS wireless service.  MCI and Sprint both signed contracts with Time Warner to carry and terminate VoIP traffic.  

The potential MSO cell phone JV can really add wood to the fire in the MSO versus RBOC war, improving the cablecos position on the "quad play".