TW nears phone service

Time Warner is inching closer to offering telephone service to cable customers.

Time Warner Telecommunications group, a unit of TW, has selected Qualcomm Inc. to provide equipment and technology for its personal communications system in Orlando, Fla.

The PCS service is a low-powered telephone that would piggyback on Time Warner’s fiber-optic cable network. Qualcomm, which is based in San Diego, would also manufacture the handsets.

The draw, said Dennis Patrick, CEO of TW Telecommunications, is Qualcomm’s ability to provide a service that would work in the home, neighborhoods, car and office.

“It’s a radio technology to operate in the four environments,” said Patrick.

Time Warner’s move into the telephone business gives it access to $ 28 billion revenues from so-called access revenue, linking local calls to long-distance carriers. It would also let TW capture a slice of the $ 7.8 billion cellular phone market, whose revenues grew 38% in 1992 alone.

The Qualcomm system will be installed by year-end and demonstrated in January. Right now, proponents of PCS are awaiting licensing by the Federal Communications Commission. Patrick, a former FCC chairman, expects the agency will auction off radio frequency spectrum across the country sometime in late 1994.

On May 13th, Qualcomm inked a deal with Time Warner’s cable partner, the Baby Bell, U S West Inc. to provide digital cellular phones. The cellular phone industry is making the transition from analog to digital service so radio waves can be compressed. This is being done to meet a growing demand for a limited space on the radio spectrum.

Patrick and others hope to introduce PCS service to consumers during this transition, with equal service and a cheaper price.