Cable Companies And Telcos Move Closer To Direct Competition

CEDAR KNOLLS, NJ — Time Warner's recently announced a voice over packet (VoIP) alliance with Sprint and MCI. This could be the first of many direct confrontations between the cable companies and the telcos.

"There is the increasing likelihood of an all-out subscriber war in 2004," says Allan Tumolillo, COO of the independent financial analyst firm Probe Financial Associates. "With aggressive marketing, we expect Time Warner to sign up as many as 1 million phone customers in the next year," Tumolillo continues.

Cable companies are basing their strategies on the assumption that they can increase their per-subscriber value by offering a diverse set of services to existing customers. The telcos are responding by partnering with satellite TV providers. This could lead to a very intense and destructive battle for both sets of service providers.

PFA's new report, "Time Warner VOIP - One Step Closer to War?" examines the competitive landscape of the U.S. wireline market and the possibility of confrontation between cable companies and incumbent telco operators.

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To obtain more information on Probe Financial Associates and its products, contact Karen Verrinder or visit PFA on the web at www.probefin.com .


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