It looks as if the next multi-year M&A dance could be on the border between cable and mobile. When asked about consolidation and Altice's recent appetite, Sprint CEO Marcelo Claure suggested that, while nothing is currently under discussion, combining Sprint with a cable operator would make the company a "stronger and more formidable competitor". This follows comments a week ago by Altice's billionaire protagonist, Patrick Drahi, indicating an eventual desire to own a US mobile network.
Of course Drahi then said Altice's US cable footprint isn't big enough yet for such a deal, and he's right. Cablevision and Suddenlink make a significant entry into the US for Drahi, but they don't cover the sort of ground geographically that would give enough synergies to justify buying a national mobile network. He seems interested in expanding that footprint first.
But it isn't just Altice that Sprint's CEO was playing to. Comcast and Charter/TWC already have (or soon will have) that sort of scale, although only Comcast is likely to have the firepower to buy Sprint from Softbank. So far they don't appear to be moving down that path, but ever since its deal for TW Cable was nixxed by regulators due to size Comcast has had to reconsider its long term growth plans. They are certainly making a move on the large enterprise space, but they have lots more firepower than that, and few targets as tempting as the wireless market.
And it isn't just Sprint that could be a target either. T-Mobile's resurgence as the 'Uncarrier' and Deutsche Telekom's longstanding interest in getting out of the US make it another obvious target for cable's consolidation appetite. An eventual combination with Altice or Comcast is relatively easy to contemplate.
While many will focus on the quad-play aspects of such a cable/wireless combination, I find the asset fit more interesting. Both Sprint and T-Mobile lack deep metro reach of their own, depending on others - often their competition - to reach the many thousands of towers they must reach. A national cable operator would be able to at least mitigate that, with a whole lot of towers on-net already and the ability to add more.
Yet in the near term any such deals are probably just a thought experiment. But you can be sure that the media and analysts covering the space will be watching for any sign that it becomes more than that, and you can be almost as sure that they will think they've found it at least a few times before they really do.
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