AOL Time Warner has agreed to a breakthrough deal for its struggling America Online Internet service that will give it access to 19 million cable homes in the US.
The deal is part of the unravelling of AOL's complex partnership with the telecom company AT&T, which was confirmed yesterday.
AOL Chief Executive Richard Parsons said the carriage agreement to provide broadband services on the Comcast cable network was a "meaningful step forward." The Internet service has been a blight on the group -- it is a market leader in dial up but has so far failed to make an impact among broadband customers. The company said it will now develop more broadband-specific content.
The media group also said it intends to seek a separate listing for its cable network, Time Warner Cable, which has 10.8 million customers. The shares in Time Warner Cable will be used as currency to build the company's cable interests. AOL will hold a 79 percent stake in Time Warner Cable and AT&T will hold the remainder ahead of the planned flotation. Parsons said the cable business would have the strongest balance sheet in an otherwise debt-laden industry. "We will be well-positioned to pursue strategic opportunities in a sector that is likely to continue to consolidate," he said.
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