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Charter Communications Plans to Enter Into Wireless Space
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Charter Communications Inc. (CHTR - Free Report) has followed in the footsteps of Comcast Corporation (CMCSA - Free Report) , announcing that it will foray into the wireless telecom service space. Charter Communications will utilize the Mobile Virtual Network Operator (MVNO) agreement that Time Warner Cable had inked with Verizon Communications Inc. (VZ - Free Report) in 2012. Notably, Charter acquired Time Warner Cable this year to form the second-largest cable multi service operator (MSO) in the U.S. after Comcast.
The Plan
Like Comcast, Charter Communications will provide its wireless network services under the MVNO deal with Verizon. It involves utilizing Verizon’s wireless network to provide mobile phone service in lieu of a lease payment. Additionally, Charter Communications will try installing several Wi-Fi hotspots across cities to expand its network.
Recent Trend
Pay-TV companies, which also include cable MSOs, have been facing severe competitive threat from video streaming service providers like Netflix Inc. (NFLX - Free Report) . This has resulted in cord cutting and high customer churn rate. In a bid to minimize customer loss, cable MSOs are considering alternatives like integrating with over-the-top (OTT) service providers. Entering into the wireless services market is another viable option to ensure steady top-line growth at these companies. Moreover, these cable giants have the required fiber infrastructure as well as the financial and technological resources to expand their wireless footprint in the future.
The Bottom Line
Entry of cable MSOs into the wireless space will intensify competition among the incumbent players in the industry. This is expected to drive innovation in products and services viz. integrated voice, video and data bundles. Moreover, this move signals that Charter Communications is leaving no stones unturned to go after Comcast in the battle among the cable giants.
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Charter Communications Plans to Enter Into Wireless Space
Charter Communications Inc. (CHTR - Free Report) has followed in the footsteps of Comcast Corporation (CMCSA - Free Report) , announcing that it will foray into the wireless telecom service space. Charter Communications will utilize the Mobile Virtual Network Operator (MVNO) agreement that Time Warner Cable had inked with Verizon Communications Inc. (VZ - Free Report) in 2012. Notably, Charter acquired Time Warner Cable this year to form the second-largest cable multi service operator (MSO) in the U.S. after Comcast.
The Plan
Like Comcast, Charter Communications will provide its wireless network services under the MVNO deal with Verizon. It involves utilizing Verizon’s wireless network to provide mobile phone service in lieu of a lease payment. Additionally, Charter Communications will try installing several Wi-Fi hotspots across cities to expand its network.
Recent Trend
Pay-TV companies, which also include cable MSOs, have been facing severe competitive threat from video streaming service providers like Netflix Inc. (NFLX - Free Report) . This has resulted in cord cutting and high customer churn rate. In a bid to minimize customer loss, cable MSOs are considering alternatives like integrating with over-the-top (OTT) service providers. Entering into the wireless services market is another viable option to ensure steady top-line growth at these companies. Moreover, these cable giants have the required fiber infrastructure as well as the financial and technological resources to expand their wireless footprint in the future.
The Bottom Line
Entry of cable MSOs into the wireless space will intensify competition among the incumbent players in the industry. This is expected to drive innovation in products and services viz. integrated voice, video and data bundles. Moreover, this move signals that Charter Communications is leaving no stones unturned to go after Comcast in the battle among the cable giants.
CHARTER COMM-A Price
CHARTER COMM-A Price | CHARTER COMM-A Quote
Charter Communications currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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Beyond this Analyst Blog, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Click to see them now>>