Charter Communications’ purchase of Time Warner Cable for $56.7bn and its recent acquisition of Bright House Networks for $10.4bn are both about taking its traditional cable/fixed broadband business to the next level by scaling a national player (and the latest with a cutthroat CEO in cable legend John Malone). The move also cuts off an aggressive competitor at the pass, as France-based Altice last week made an offer for US-based cable operator Suddenlink Communications and floated the idea of going after Time Warner itself.
The key will be finding the right mix of traditional cable service, broadband-fueling OTT and content deals flowing across each and every access medium. In all of these endeavors, scale helps tremendously – as AT&T is pursuing with its $48.5bn DIRECTV buy, Verizon with its aggressive OTT video plans and $4.4bn AOL pickup, and Comcast with… well, Comcast looks like it’s going to need its own second act (with perhaps a landscape-changing mobile merger being just the ticket, though we’ll leave that conjecture for another day).
Will this latest telecom deal get done? The impact will certainly be more ‘pro-competitive.’ With today’s purchase, Charter will grow to 24 million subscribers, compared with Comcast’s 27 million – making this acquisition a much different proposition than the ‘big getting bigger’ via the abandoned Comcast-Time Warner combination.
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