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Comcast Inks Partnership with Charter for Wireless Service

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Charter Communications and Comcast both make up the biggest names in the cable industry. Now that they have announced a merger, things in the wireless industry are about to get shaken up. According to the announcement, these two companies have joined forces as a way to safeguard their budding cellphone businesses against going after each other.

With the merger in place, these two companies will both be exploring the "operational efficiencies" of the wireless industry involving everything related to it. Under the deal, both companies have agreed to cooperate on figuring out things together instead of attending to independent merger talks with other wireless carriers.

The merger was first reported by the Wall Street Journal. Essentially, both parties entered into the agreement as a way to protect their early investments. Since this is an industry they're starting to break into, they definitely need to protect the investment they are putting into it. Although this looks like a small announcement, the merger actually has some pretty big implications for TV, online media, and cellphone service. Charter CEO Tom Rutledge explained on a press release that this merger will enable the company to be more competitive and offer more pricing options for its users.

Just last month, Comcast expressed its plans for Xfinity Mobile. This is a new wireless service they intend to launch in the middle of the year under Verizon's network. On the part of Charter, it has since expressed its plans of launching its own wireless service by 2018. They even have a separate reseller agreement with Verizon.

Right now, there is no clear indication that the merger between both companies will expedite the launch of Charter or even the idea that the two will take away the spot of T-Mobile or Sprint as the third and fourth largest carriers in the country.

So why are cable companies so adamant to go wireless? To think about it more deeply, traditional mobile brands like Verizon & AT&T are already considered key figures in entertainment, media, broadband, and tech. With the cable companies entering into the picture, there is sure to be an overlap of interests. But basically, each of these companies are hoping they could entice new customers as well as keep the loyal ones interested by offering a mishmash of bundle offers under phones, TV, and internet.

Eventually, there will be a modest consumer impact with the merger. But even if they have merged for this venture, the two companies will continue to sell to their own customers. Since Comcast will be offering services for those who love cable TV yet don't use wireless, they won't be touching base with Charter's consumer offer. It is important to note, however, that Charter purchased Time Warner Cable a year ago, which operates under the Spectrum broadband.

When Comcast launches Xfinity Mobile service, subscribers may get to choose between a $45 or $65 per month per line "unlimited" plan. They have the option to add up to five lines under the plan. Customers who are on Comcast's "best" X1 video package can enjoy lower monthly prices reserved for them. Since there is no per line access fee, each user will get to enjoy the same unlimited talk and text services.


Source: USAToday

8 comments:

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  1. This merger is wrong in so many dimensions, I don't know if I am going to laugh or cry.

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    1. Comcast and Charter have not 'merged.' They just merged their wireless divisions to form a kind of partnership to offer wireless services to their customers (expand their bundles), rather than continuing to develop wireless service independently. Verizon, which had MVNO agreements with both, says they encouraged the two companies to work together.
      Comcast and Charter are doing this to maintain revenue and profits, since many customers are 'cutting the cord' for cable TV. Wireless market is saturated, and entertainment is consuming most mobile data now (FaceBook and video). These companies want to retain customers by offering their valuable content over mobile to satisfy and retain customers. Expanded bundles may also attract customers from the wireless companies (who are also adding entertainment options). Verizon says they are not worried about this, but I doubt that. They will take the money now, knowing that they are helping the cable companies become stronger competitors later.

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    2. New Street says cable companies will take 9M wireless subscribers from Vzw and AT&T by 2018.

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  2. This is bad news because it eliminates competition, limit consumer choices, and ultimately lowers service quality and drive up cost.

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    1. Not necessarily. The effectiveness (quality) of competition is what's important, not just the quantity of competitors. Which is the main reason why there have been so many wireless company mergers and acquisitions. If you double the volume, Verizon will negotiate a better MVNO agreement, which benefits both cable companies and their customers. Verizon saves money in admin costs with one negotiation and agreement to manage, so they can afford to pass on some or all of the savings without hurting profit.

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    2. Yeah, it INCREASES competition in cellular by adding new players.

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  3. It's misleading to say merger. It's more like a non compete agreement at this point.

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  4. I wouldn't mind paying $100 for unlimited wireless broadband with unlimited hotspot, unlimited talk, unlimited text, and all channels (sans the premium movie and sports networks).

    Otherwise, it costs over $150 between wifi, cable and a separate mobile plan.

    If Xfinity's phone/internet plan WAS a mobile plan (with unlimited hotspot for laptops and other devices), it'd reduce both redundancy and costs.

    There's just one problem:

    Comcast is a reseller, so they can't do unlimited without paying out the ass and going bankrupt.

    Karma found this out the hard way, which is why they destroyed their reputation just to cut loose such a huge liability.

    The fact is, the only way to truly compete with wireless networks is to either build your own or buy one out, which makes this entire endeavor doomed to fail.

    Even wifi fallbacks aren't a good option given the security and sniffing concerns, which is why I'd consider any plan that uses public wifi for data transmissions as "dead on arrival."

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