Time Warner Cutting The Wires?
By Mike Masnick, Thu Nov 04 01:45:00 GMT 2004

Time Warner admits that its really serious about adding mobile phone service to its bundle of offerings. Is this just about adding another service, or about recognizing the need to cut all wires?

Time Warner has hinted for some time that it's interested in offering mobile phone service. Articles suggesting just such a move appeared in March and June of this year, so it's really not a huge surprise to hear Time Warner executives sounding a little more serious about the idea.

While this really might just be about turning the triple play into a "four play" of services, it might be about much more. The indications from the beginning have been that Time Warner would simply take the obvious route and do an MVNO. It would slap its brand on someone else's network and bundle it with cable service, getting a bit more revenue per user, while dropping churn a bit further (since bundled customers are less likely to switch).

However, it's also possible that the company has bigger goals. While Time Warner execs later made it clear they hoped to create an MVNO-style partnership, the original statement suggested that an acquisition was not out of the question. Perhaps the MVNO offering is really just a way for Time Warner to get its feet wet in the wireless world before going a bit further. Wireless isn't necessarily a "fourth" service. The three parts of the triple play are voice, video and data over a single pipe. Wireless isn't a fourth service -- it's a way of getting rid of the pipe entirely. In other words, rather than offering voice, video and data in the home, it's about voice, video and data anywhere at any time on any device.

That, alone, is a much more compelling selling point. Using an MVNO is a way to get more experience with wireless issues. Time Warner has already started some experiments with Wi-Fi and it wouldn't be surprising to see similar experiments with wide area wireless broadband solutions at some point in the future as well. Then, by cutting the wires to the triple play, the combined solution is not only much more compelling, but is likely to generate much more usage simply by being available in many more situations.

It's likely that this is giving Time Warner too much credit in terms of its overall plans. However, it's becoming increasingly clear that this is the direction service providers will head. In the US, both Verizon and SBC appear to be heading down a similar road, if from a different starting point. The one wild card with Time Warner, however, would be if it could figure out how to bring AOL into this plan. It's no secret that the AOL part of Time Warner has been having trouble lately -- losing 2 million customers in the past year. However, the company still has a strong brand and a reputation for providing user-friendly access. If Time Warner could adjust AOL to be the front end of a complete, disconnected, triple-play service it could be a powerful player in how people connect, while making everyone realize that the triple play to the home is way too confined.