BEIJING, May 8 -- Time Warner Cable Inc, having lured 2.1 million residential phone customers in its service's first three years, is now setting its sights on companies, escalating competition with telephone providers.

    Time Warner Cable is about three weeks into selling phone service to small and medium-size companies in five American cities including Austin, Texas, and Syracuse, New York, Chief Executive Officer Glenn Britt said.

    Time Warner Cable and Comcast Corp are offering telephone and high-speed Internet services to companies with fewer than 500 employees, a market that yields about 40 billion U.S. dollars in annual revenue to phone companies such as Verizon Communications Inc, Bloomberg News reported. Britt and Comcast CEO Brian Roberts, in Las Vegas this week for the cable industry's annual convention, both plan to make a push in the commercial phone market this year.

    "The market could get significant for cable," said Craig Moffett of Sanford C. Bernstein & Co in New York, the best- ranked cable analyst by Institutional Investor magazine. "There's never been a competitor to the telcos in this segment, and for that reason, prices have been high. That leaves the window wide open for the cable companies to offer services at a more competitive price."

    Cable companies are trying to stave off AT&T Inc and Verizon, the two largest phone companies in the United States, which will spend a combined 30 billion dollars on their fiber networks to sell television services that threaten cable companies' main source of revenue.

    Time Warner Cable, based in Stamford, Connecticut, makes about two-thirds of its annual sales selling cable-TV services.

    "We are in competition with phone companies, they're going into video," Britt said in an interview last week at his new office overlooking Central Park in New York. "We have a big opportunity selling services to businesses."

    Cablevision Communications Corp Chief Operating Officer Tom Rutledge said last week that Verizon is "having an impact on our business, which you can see in our subscriber growth."

    The comments were one of the first acknowledgements by a cable executive that Verizon made inroads with its TV service.

    The convention, called the National Show, runs until Tuesday.

    AT&T began selling its U-verse TV service this month in Los Angeles, where Time Warner Cable has said it struggled to integrate cable systems it acquired last year and lost customers.

    Conversely, phone companies' efforts have so far failed to gain market share from Time Warner Cable and Comcast. Verizon, based in New York, had 348,000 FiOS TV subscribers at the end of March.

    (Source: Shanghai Daily)