Time Warner Cable mulling wireless
Company's looking at ways to offer wireless phone service, executives say. The move is targeted at the Baby Bells.
During a conference call after reporting quarterly earnings, executives agreed that wireless phone service would be an essential addition to the offerings of their Time Warner Cable cash cow. The idea is to bundle wireless into the division's "triple threat" offering of video, high-speed Internet and voice services.
"We know, because of consumer behavior, that wireless will be an important part of that bundle," said Don Logan, chairman of Time Warner's media and communications group.
Logan added that the company would be open to many avenues into the wireless business and did not rule out an acquisition. However, Time Warner CEO Richard Parsons later said a partnership with an existing wireless provider would be a more likely scenario.
"I would look for us to begin to explore relationships in the wireless space...before getting into anything in an acquisition sense," Parsons said during the call.
Time Warner's consideration of getting into the wireless business illustrates a missing piece in cable's arsenal. Cable companies, including Comcast, Cox Communications, Charter Communications and Cablevision, have found success in bundling their bread-and-butter video programming with new businesses. Demand for broadband Internet access has helped cable companies sell multiple services on one fat pipe to their customers. Adding voice lines further threatened phone companies.
While cable was first to market the triple threat, the Baby Bells are responding with their own packages. Verizon Communications, SBC Communications, BellSouth and Qwest Communications recently struck deals with satellite TV providers Hughes Electronics' DirecTV or EchoStar's Dish Network to offer customers a way to get video programming. SBC is testing ways to deliver video services over the Internet, while Verizon is preparing to offer analog video to its customers.
The Bells face a dire trend in which customers are dropping their landlines for cable and rival wireless services. They are responding by bundling their own wireless businesses with DSL, satellite video and local and long-distance phone service.
Most cable companies don't have a wireless product, so adding wireless could strengthen their position against the Bells' incursion.
Separately, Logan said Time Warner Cable remains on course to offer Internet phone service--VoIP, voice over Internet Protocol--to all of its markets by the end of the year.