Charter Joins Rival Comcast in the Wireless Arena

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charterNow Charter Communications wants to be in the wireless business too. The news comes a day after rival Comcast said it plans to invoke a 2011 deal with Verizon and launch a wireless service that would run on a combination of its own WiFi and Verizon’s network by mid-2017, Inside Towers reported yesterday.

Charter jumping into the wireless business could mean more competition for Verizon and AT&T, which dominate, reports the AP. Since its purchase of Time Warner Cable in May, Charter is now bigger, claiming 25 million+ customers. In contrast, Comcast has 28+ million.

Charter CEO Tom Rutledge said at an investment conference Wednesday the company told Verizon it’s interested in activating a deal with the phone company to resell its cellular network. Charter’s agreement with Verizon is similar to the Comcast-Verizon arrangement announced Tuesday.

Charter’s Rutledge did not offer details about timing, pricing or the potential handsets the new service would be compatible with, reports the WSJ. “We have talked internally about how to build out our network to capacity…and how to do that both terrestrially and wirelessly,” he said. Like the Verizon-Comcast arrangement, Charter’s vision too, involves using its WiFi hot spots to support a mobile service that would rely on Verizon’s cell network where WiFi isn’t available. 

He did say the company would need to build out a network at some point, reports Light Reading. “When you think about the new architecture five years down the road for mobility, you’ll have a traditional cellular umbrella but you’ll also have these really small cells. And I think we’ll have one of those in every house and every business we serve.”

Analysts are studying whether the deals makes sense in the long-term. Inside Towers reported the Comcast-Verizon agreement could steer wireless traffic away from towers. New Street Research analyst Jonathan Chaplin told the WSJ a cable company could “easily steer more than 75 percent of data traffic to WiFi.”

“We believe this will mark a turning point for the U.S. communications landscape,” said Chaplin, who believes cable could poach some market share from wireless incumbents, estimating the wireless business could be worth at least $6 a share of upside for Comcast’s stock, translating into over $14 billion of market value.

The terms for both deals are not public. Comcast in particular has said it doesn’t need to own its own network. The costs would be prohibitive.

Comcast would lease airwaves from Verizon, avoiding infrastructure costs like network integration and actual tower sites. The agreement with Verizon allows Comcast to sell wireless services using Verizon’s network at set terms and pricing, reports Forbes. Comcast CEO Brian Roberts said earlier in the week the company will focus on up-selling bundles that include wireless to existing customers, rather than compete for new wireless customers; that means Comcast would be offering combos of cable, broadband internet and now wireless.

 

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