Comcast, Charter Ward Off Deal Talk With Cable Mega-Alliance

Comcast, Charter Ward Off Deal Talk With Cable Mega-Alliance

Comcast, Charter Ward Off Deal Talk With Cable Mega-Alliance

Rival cable operators Comcast and Charter Communications said Monday that they will work together as they prepare to offer cellphone wireless plans to customers.

"Both of our companies have regional wireless businesses using the same 4G LTE network, and by working together our goal is to create even better experiences for our customers", added Brian L Roberts, chairman and CEO of Comcast.

Both companies have been moving into the wireless communications space.

We've already heard a fair amount about Comcast's plans for a mobile service, slated to launch to existing Comcast customers in a few weeks or months.

"(The partnership) will also enable us to provide more competition and drive costs down for consumers at a similar national scale as current wireless operators", Charter Chief Executive Tom Rutledge said in a statement. While it's possible Charter and Comcast could try to jointly acquire either US wireless provider, such a transaction is more complicated to pull off. Sprint, the fourth-largest wireless carrier, had seen Charter or Comcast as potential alternatives to a merger with No. 3 T-Mobile, people familiar with the matter said last month.

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Comcast and Charter Communications will work together, forming something of a truce, as they advance into the wireless arena. Verizon and AT&T are the largest wireless providers in the United States by number of customers.

The alliance probably lowers the chances of a wireless acquisition by either cable provider in the near future, though the agreement could be a precursor to the cable industry jointly owning a wireless company down the road. They also face the long-term threat from wireless companies like AT&T that are building the fifth-generation of wireless services, known as 5G, that could offer blazing-fast internet speeds on consumers' phones that are competitive with cable operators' broadband service. As part of the terms of the deal, sources said neither company would be permitted to complete a wireless-related merger without the other's blessing. But if either Comcast or Charter were to buy a wireless carrier such as T-Mobile or Sprint, it suddenly would be able to sell service nationwide, including in the other cable company's region. The Obama administration rejected Comcast's deal to buy Time Warner Cable, later allowing Charter to buy it.

Charter has stated it will roll out a mobile service in 2018, also under a network leasing deal with Verizon.

Mobile, on the other hand is genuinely competitive; we'll happily grant that. Either company acquiring T-Mobile or Sprint would have been an untenable situation.

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