Comcast is already the largest cable provider in the United States, but the company is looking to expand its reach. This week, the cable giant has announced it is teaming up with another leader in the industry, Charter Communications (NASDAQ: CHTR) to jointly explore “operational efficiencies” within the wireless industry to cover everything from seamless Wi-Fi to back office billing operations. The aim is also to “accelerate and enhance each company’s ability to participate in the national wireless marketplace.”
This makes sense, to a degree, of course, as each company competes with Verizon (among others) on cable service and internet service.
Charter Communications (NASDAQ: CHTR) CEO Tom Rutledge explains, “By working with the team at Comcast, we can not only speed Charter’s entry into the [wireless] marketplace, it will also enable us to provide more competition and drive costs down for consumers at a similar national scale as current wireless operators.”
Now, Charter actually has a separate reseller agreement with Verizon, and is planning to launch its own wireless service at some point next year. Now, it is not exactly clear, yet, how this is going to work, but Recon Analytics analyst Roger Entner appears optimistic.
He says, “I think the overall impact for consumers will be low. Both companies will only sell to their own customers in their footprint. This remains a defensive play, but now with some better economics for the Comcast and Charter. Comcast’s offer continues to be great for people who love cable TV but don’t use wireless. We don’t know yet how aggressive or meek Charter’s consumer offer will be.”
It is a big move, obviously, but also an important one; and maybe a necessary one. Transitioning to mobile and wireless can give any company a major foothold, particularly those with content that consumers want. Verizon and AT&T, for example, are both major players in the media, entertainment, tech, and broadband industries and that means their interest overlap with the cable companies. And right now, when everyone is scrambling to keep consumers happy, bundling TV, internet, and phones seems a smart strategy.
All that aside, Rutledge concludes: “at Charter, we have a tremendous opportunity in front of us in the wireless space. Within our footprint, our network is perfectly suited to provide the data-rich wireless services that customers are increasingly demanding. By working with the team at Comcast, we can not only speed Charter’s entry into the marketplace, it will also enable us to provide more competition and drive costs down for consumers at a similar national scale as current wireless operators.”