charter communications

Charter Communications CEO Tom Rutledge promised the president he would “invest $25 billion in broadband infrastructure and technology in the next four years.”

But the company had planned to make the expansion during the previous administration. A merger condition from last year made Charter bring 60Mbps download speeds to millions of customers.

The requirement does not force the company to expand access to more customers than what they had committed to years ago.

“This is not tied to a number of new broadband customers. This is an overall broadband infrastructure and technology investment commitment over the next four years,” a Charter spokesperson told Ars today when we asked how many additional customers will get service.

Charter Communications Inc will upgrade its multi-screen app. The company will launch an in-home and TV Everywhere app named Spectrum TV. This occurs right after Charter Communications Inc acquired Time Warner Cable and Bright House Networks. The latest TV app will unite the TV experience on a single platform.

The Wall Street Journal reports the two are exploring a deal. An agreement would create a huge company with stakes in cable TV, mobile services and home internet. Analyst believe this represent the latest in industry consolidation. One analyst believes companies want to control Internet operations in the United States. Verizon provides service to millions. This includes over 4 million television customers, 7 million Internet users, and over 110 million cellphone subscribers. The newly merged entity would compete with, even exceed, Comcast’s customer base. Neither company provided a statement to the press. Wireless industry rivals compete fiercely in the phone industry. Therefore, Verizon pursues deals with Internet companies.

Think companies like Yahoo. Plus, customers flee traditional media companies to online choices. This results in cancelled service. According to one analyst, Verizon’s wireless business faces daunting headwinds. The company had difficulty providing online video. So the company pursued a larger deal to make a bigger dent in the arena. Most likely, Charter will not be the only deal Verizon tries to pursue this year. The internet/media industry believes such large mergers are possible soon. The new US administration may provide a more business friendly regulatory environment than the previous administration.

Verizon has other reasons to pursue a deal with Charter. CEO Lowell McAdam and others desire a cheaper, faster wireless method to deliver internet to subscribers. According to Fortune, this led him to consider a deal with a large cable company.

In this case, Charter is one of those companies. The merger faces another challenge. The fifth-generation of wireless technology, 5G, hovers on the horizon. This technology uses high frequency airwaves to carry far more data than 4G tech. Unfortunately, 5G do not travel far and cannot go through obstacles like walls effectively. Companies like Verizon could reduce 5G expenses by using a cable company’s network. Right now, however, pundits believe 5G is an aspiration.

Verizon may acquire Charter Communications Inc at a 20 percent premium to its share price. This would lower Verizon’s profit by over 35 percent. The company would need almost $17 billion to break even on the deal. Furthermore, the company retains massive debt following its 2014 Vodafone deal.

That agreement totaled $130 billion. Since then, Verizon promised to reduce its debt and lower its debt. But making a large purchase may prevent that plan from happening. We will report if Verizon pursues any large deals this year.

 

Source: Ars Technica

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