Time Warner's Cable Network Attracts Suitors: AOL and AT&T

Strategic Insights -

Time Warner's massive 12 million subscriber cable network has piqued the interest of AOL and AT&T, both of whom see it as a vital entry point into the rapidly expanding broadband Internet market. As cable-based Internet access gains popularity worldwide, with its "always open" connection and ability to carry broadcast-style content, AOL aims to tap into this growth by leveraging Time Warner's vast cable network. Meanwhile, AT&T seeks to tap into local telephony markets through a deal with Time Warner, building on its recent acquisition of cable giant TCI. For Time Warner, an alliance with either company would grant instant access to the burgeoning cable telephony market, a crucial revenue stream for US cable operators.

Key Takeaways:

  • AOL is eyeing Time Warner's 12 million subscriber cable network to gain a foothold in the broadband Internet market, where cable-based access is gaining popularity.
  • AT&T's acquisition of TCI is seen as a strategic move to tap into local telephony markets, with a deal with Time Warner offering an instant route into this market.
  • Time Warner has already invested heavily in upgrading its cable networks for voice and data traffic, with plans to spend $4 billion by 2000.
  • The cable giant could potentially launch telephony services independently, but an alliance with an experienced partner like AT&T would simplify the process and reduce costs.
  • Time Warner's deal with AT&T or AOL would grant instant access to the cable telephony market, a key revenue stream for US cable operators.

Statistics:

  • 12 million: The number of subscribers in Time Warner's cable network.
  • 4 billion: The amount Time Warner plans to spend upgrading its cable networks for voice and data traffic by 2000.
  • - AT&T's recent acquisition of cable giant TCI marks its aggressive pursuit of a local telephony strategy.

Sources:

  • Bloomberg (Author not specified in the provided text)

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