http://www.foxbusiness.com/markets/2017/05/08/rpt-comcast-charter-to-announce-wireless-partnership.html
Rpt: Comcast, Charter to Announce Wireless Partnership
Published May 08, 2017
Comcast and Charter Communications will announce a wireless partnership on
Monday, according to a source familiar with the matter, as the cable providers
prepare to enter a highly competitive and oversaturated market for mobile
service in the United States.
The partnership is aimed at cutting the significant costs of entering the
wireless market, as well as speeding up entry, the source said. The deal will
bar either company from entering into a material transaction for a year without
the other company's consent, the source said. That would prevent either company
from tying up with a wireless carrier immediately on its own.
In January, Reuters reported Verizon Communications was interested in exploring
a combination with Charter as part of a long list of acquisition targets, but
no proposal had been made for a tie-up between the two companies. Analysts and
investors have also speculated that Comcast could buy a U.S. carrier, such as
T-Mobile US Inc or Sprint Corp, as its ambitions grow in the wireless market.
At a Lions Gate Entertainment investor conference in January, John Malone,
whose Liberty Broadband is Charter's largest stakeholder, raised the
possibility that major cable companies could get together and buy T-Mobile.
Monday's agreement between Comcast and Charter will allow the companies to cut
costs and share technology expertise, as well as offer customers benefits such
as seamless connection between their Wi-Fi hotspots, the source added, asking
not to be named because the matter is private.
JPMorgan Chase analysts wrote in January that building a wireless business
could cost Comcast hundreds of millions of dollars annually in the first few
years, potentially cutting as much as 5 cents to 10 cents off earnings per
share in 2017.
Representatives for Comcast and Charter declined to comment. Representatives
for Verizon and T-Mobile could not be reached immediately for comment.
Comcast in April gave new details about its plans for a wireless service, which
will launch on Verizon's airwaves as part of a 2011 agreement between the two
companies. The service will allow customers to switch automatically to
Comcast's Wi-Fi hotspots from 4G LTE. It will launch in coming weeks, the
source said.
Comcast is moving into wireless as cable companies seek to add more services to
reduce customer churn, or attrition, as younger viewers shun high-priced
subscriptions in favor of cheaper online options.
Rival Charter has said it will introduce a mobile service in 2018.
The Wall Street Journal first reported the partnership, without giving further
details.
(Reporting by David Shepardson in Washington and Olivia Oran and Anjali
Athavaley in New York; Editing by Sandra Maler and Randy Fabi)
