Comcast, Charter to Strike Wireless Partnership, Sources Say -- Update
May 07 2017 - 8:55PM
Dow Jones News
By Dana Mattioli and Shalini Ramachandran
Comcast Corp. and Charter Communications Inc. are striking a
wireless partnership, people familiar with the matter said, as the
cable giants look to get a piece of the cutthroat business.
As part of the deal, Comcast and Charter have agreed not to make
a material merger or acquisition in wireless without the other's
consent for one year, one of the people said. That agreement could
stoke Wall Street speculation among investors and analysts that the
two largest U.S. cable companies together could decide to make a
play for a carrier like T-Mobile US Inc. or Sprint Corp. Neither
company as a single entity could buy another wireless carrier for
that time period as a result of that agreement, the person
said.
Comcast recently released plans to offer a wireless service to
its customers and purchased airwaves that could be used to help
offer it in a government spectrum auction.
Charter has said it would offer wireless service as soon as next
year. Both plan to rely on a five-year-old agreement with Verizon
Communications Inc. that allows them to resell Verizon's airwaves
to offer cellphone service to their cable customers. Comcast plans
to start offering its mobile service to customers as soon as later
this month.
The new operational partnership will allow Charter and Comcast
to share technology and work together to use their combined scale
in vendor negotiations with the likes of Samsung for handsets, for
instance, one of the people said. However, the two companies will
keep their customer-facing wireless storefronts and mobile plans
separate.
The idea is that the partnership will allow the companies to
share what they learn about what works and what doesn't in service
plans and achieve potential cost efficiencies.
Comcast and Charter will each still only offer wireless service
within their respective cable footprints -- not nationwide, the
person said.
The deal is likely to be announced on Monday, the people
said.
Wireless carriers are fighting it out in a fierce price war,
while cable companies like Comcast and Charter are dealing with a
saturated pay-TV business under assault from threats like
cord-cutting and cheaper online video services. The cable companies
view wireless phone service as an opportunity to create a new
product to make their bundles more appealing and better retain
existing customers. They hope that by offering a "quad play" of
cable TV, home internet, landline phone and wireless service,
customers will be less likely to drop their service and jump to a
rival.
Write to Dana Mattioli at dana.mattioli@wsj.com and Shalini
Ramachandran at shalini.ramachandran@wsj.com
(END) Dow Jones Newswires
May 07, 2017 20:40 ET (00:40 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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