How the Comcast-Charter deal affects you
Partnership should boost competition and lower costs, both cable companies say
Two of the biggest cable companies are joining forces in wireless.
On Monday, Comcast teamed with another cable giant, Charter Communications, to jointly explore “operational efficiencies” in wireless on everything from back-office billing to seamless Wi-Fi handoffs, with a pledge to help each other in other, unspecified ways. The deal, first reported by The Wall Street Journal, is the latest foray by cable companies into the cellphone business.
Only last month, Comcast unveiled plans for Xfinity Mobile, a new wireless service that launches midyear and leverages the Verizon Wireless network.
Charter has had designs on launching its own wireless service in 2018 and has a separate reseller agreement with Verizon. It isn’t clear if this new partnership will speed up Charter’s launch or will increase the likelihood the two companies might try to snatch up T-Mobile or Sprint, the nation’s third- and fourth-largest wireless carriers. Under the agreement, Charter and Comcast can only explore “material transactions” in the wireless industry together, for a period of one year.
Why are the cable companies so keen on wireless? The largest traditional cellphone combatants, Verizon and AT&T, are also powerhouses in media, entertainment, tech and broadband, so there are overlapping interests with the cable guys. All of the companies are trying to keep existing customers as well as woo new ones, with a smorgasbord of compelling bundle offerings in TV, phones and Internet.
In the short run, however, the consumer impact is likely to be modest.
“Both companies will only sell to their own customers in their footprint,” Recon Analytics analyst Roger Entner sad. “This remains a defensive play but now with some better economics for Comcast and Charter. Comcast’s offer continues to be great for people who love cable TV but don’t use wireless.”
Charter hasn’t spelled out details for what its consumer wireless offering will look like. It purchased Time Warner Cable last year and operates the Spectrum broadband brand.
Under the upcoming Xfinity Mobile service, subscribers will pay $45 or $65 per month per line up to five lines for “unlimited,” with the lower monthly price reserved for customers on Comcast’s “best” X1 video packages, typically those that start around $150 per month. Unlimited talk and text is included, and there’s no per-line access fee.
Both cable companies said the partnership should lower costs, making their offerings more competitive with other carriers. In a joint release announcing the alliance, Charter chairman and CEO Tom Rutledge said, “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.”