Big Changes in Strategic Thinking

There is a good reason T-Mobile US CEO John Legere has been talking up both the value of deals with cable TV operators or Dish Network. It is the same reason Liberty Global Chairman John Malone believes a merger with Vodafone Group would be a “great fit.”

The new thinking by most service providers is that long term success requires ownership of both fixed and mobile assets to create the ability to offer big service bundles including voice, messaging, mobility, video and Internet access.

Vodafone, the world’s second-largest mobile-phone company, has in the past largely been a mobile service provider. Liberty Global has been a fixed network operator. But Liberty now says it wants to buy mobile networks, and already has done so in Belgium.

Some of that same thinking might underlie Altice’s purchase of U.S. cable TV company Suddenlink Communications. Altice is the second-biggest mobile service provider in France, and also is the second-biggest cable TV operator in France.

The new thinking is leading to novel behavior. For the first time ever, a significant European telecom company is getting into the U.S. cable TV business.  

And Liberty Global, which historically had eschewed ownership of mobile assets, now has reversed course.
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