AT&T and Time Warner unveil cable telephony pact

AT&T and media giant, Time Warner are to launch a joint venture offering telephony services to cable TV subscribers in 33 US states.

The 20-year deal will see AT&T take a 77.5 per cent share in the new company and pay Time Warner an estimated $300m for exclusive access to its 12 million cable customers. AT&T expects the venture to pull in annual revenues of $4bn after three years.

The move extends AT&T's reach to over 40 per cent of US homes, boosting its bid to take on regional phone operators. AT&T's $48bn acquisition of cable giant TCI is expected to receive shareholder approval later this month, bringing over 30 million households within the telco's domain.

The firms plan to launch a pilot cable telephony service in one or two cities by the end of the year, with a full roll out scheduled for 2000.