Time Warner Hopes to Gain Presence in US Cell Phone Industry

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Time Warner Hopes to Gain Presence in US Cell Phone Industry

7:20 am on April 6, 2006 | Category: Business, Telecom Services, Mobile Devices

Time Warner chairman and CEO, Dick Parsons, said in a recent interview that he plans to give the company a strong presence in mobile phone services, either by purchasing wireless spectrum, or through an acquisition.

Parsons says that Time Warner will need to find a way of adding wireless to its triple-play (TV, phone, and internet) offering, after completing its $18 billion acquisition of cable operator, Adelphia.

“The ultimate table has to be constructed with four legs, not three. The fourth leg will be wireless – how one solves the equation I don’t know,” Parsons was quoted as saying.

Time Warner is already the second-largest cable operator in the US, and is experiencing strong growth in both subscribers and profits, as a result of its triple-play bundling strategy. But concerns about telephone providers catching up and offering a quadruple-play (TV, phone, internet, and wireless) range of services means that the cable company must corner the cell phone market to stay competitive in the long term.

The cable giant already has a partnership to resell Sprint Nextel’s wireless services, but will need to have its own in-house service to have a big enough stake in the fast-growing wireless industry.

With acquisition options limited (Cingular, Verizon, and Sprint are all controlled by big telephone companies), Time Warner might eventually find itself bidding on wireless spectrum to fulfill its long-term goal of breaking into the mobile phone industry.