Comcast and Charter set to launch wireless partnership

By:
James Pearce
Published on:

US cable operators have struck an agreement that will prevent either company from making wireless acquisitions without permission from the other

Comcast and Charter Communications are set to announce a partnership in the wireless market, according to reports from the US

The two cable giants have already unveiled plans to launch mobile propositions, but according to the Wall Street Journal, they will announce an agreement that will prevent either company from buying or merging with wireless companies without the others permission.

The partnership will allow the two cable firms to cut costs and speed up their entry into the competitive mobile market by sharing technological expertise, according to a Reuters source.

The US mobile market already consists of four major players – Verizon, AT&T, Deutsche Telekom’s T-Mobile, and SoftBank’s Sprint – but both Comcast and Charter have openly spoken on entering the market.

Reports in January claimed one means of entry for Charter would be a partnership with Verizon, although no deal has been forthcoming and this agreement would prevent a tie-up for at least a year.

Analysts in the US have also speculated that Comcast could seek to buy one of the smaller mobile providers – T-Mobile or Sprint – to make a quicker entry into the market, although this would once again prevent that unless they had Charter's permission.

Comcast’s mobile proposition is set to run over Verizon’s network and its own Wifi hotspot base, according to details revealed in April. It will offer an unlimited data plan. A Reuters source claims it will officially launch in “coming weeks”, although no specific date was given.

One possibility could be the joint purchase of one of the mobile providers, as the deal would allow for them to form closer ties to launch a wireless offering. However, with Comcast reportedly so close to launch, and Charter set to launch its own proposition in 2018, this seems less likely.

John Malone, whose Liberty Broadband Group is the biggest shareholder in Charter, has previously admitted that cable companies could team together to buy T-Mobile from Deutsche Telekom. Deutsche almost sold T-Mobile to Sprint in 2014, but the former has now surpassed SoftBank’s US mobile operation in terms of customer numbers.

The appointment of Ajit Pai as FCC chairman in January, and Donald Trump’s presidency, could encourage operators in the US to enter more mergers and acquisitions. Pai has already opted not to investigate AT&T’s $85 billion takeover of Time Warner, and Trump’s administration is seen as being more friendly towards M&A activity.