Comcast, Charter, Sprint Talk Partnership, Deal, or Something

That’s the merger-related news making the rounds this morning.  The cable giants Comcast and Charter are talking with Softbank-controlled Sprint in a two-month period of exclusive negotiations.  

Charter and Comcast set up a partnership last month under which they would coordinate any possible move into the wireless space.  Such a move could be anything from a simple network resale agreement all the way to a joint buyout of a wireless player like T-Mobile USA or Sprint.

I’m starting to get the sense that the buyout option is a real possibility.  Cable operators have long looked at getting into wireless, but doing so via a network resale agreement has been available to them for a long time – it just doesn’t shift the needle enough to make it worth the trouble.

But while many describe the motivation for that interest from a consumer perspective of being able to bundle wireless and cable services, I think perhaps the better way to look at the idea is at the infrastructure level.  The depth of backhaul needed for nextgen 5G networks is just immense, and in anticipation wireless and wireline networks are becoming more tightly integrated.  Keeping them in separate worlds is making less and less sense.

These talks with Comcast and Charter put a wet blanket over the other expected merger talks we are all waiting for, T-Mobile and Sprint.  Merging the two mobile networks could bring huge synergies and could probably pass regulatory muster now, but it would be a messy and time consuming process.

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Categories: Cable · Mergers and Acquisitions · Wireless