One Way or the Other, U.S. Cable TV Market Changes

Bright House Networks might be called a consolation prize for Charter Communications if the Comcast bid to buy Time Warner Cable is approved by regulators. As structured, a Charter offer to buy Brighthouse is contingent on regulator acceptance of the Comcast offer.

Charter had made a bid of its own to buy Time Warner Cable, but its offer was topped by Comcast’s own offer. The $10 billion offer for 2.5 million subscribers values Bright House at about $4,000 per subscriber, a valuation metric not used in the broader telecom business.

U.S. cable TV operator rankings will change, in almost any conceivable set of decisions and deals. Comcast, which became the largest U.S. cable TV operator when it acquired the assets of AT&T Broadband, was trailed by Time Warner Cable as the clear number two cable company, ranked by number of subscribers.

If Comcast is successful in gobbling up Time Warner Cable, Charter gets Bright House, creating a new number-two provider for the first time in decades. For decades, Time Warner has been the second-biggest U.S. cable TV provider, behind either Tele-Communications Inc., which sold to AT&T, or AT&T Broadband itself, which then was purchased by Comcast.

Charter has held the number-three spot in the rankings, but with a wide gap between it and a Comcast that has added Time Warner Cable.

If the Comcast bid is scuttled, observers expect Charter to reemerge with a bid to buy Time Warner Cable. That would also create a new number-two provider, but far larger than a Charter that had purchased Bright House.
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