Charter shoots down Sprint bid, stands by claim that wireless business ‘has a lot challenges in front of it’

Tom Rutledge
Charter Chairman and CEO Tom Rutledge said the company likes its MVNO arrangement with Verizon.

While Charter Communications' rejection of Sprint’s merger bid made headlines over the weekend, the cable company actually made its disinterest known during its second-quarter earnings call Thursday, when Charter Chairman and CEO Tom Rutledge echoed the bearish sentiments of Comcast Chief Executive Brian Roberts from earlier that morning. 

“I agree with Comcast's point of view on that,” Rutledge said when asked by an investment analyst if Charter might be interested in “owners economics” within the wireless business. “But we like our MVNO. We like our relationship with Verizon. We like our potential relationship with Comcast. And we do think that the industry has a lot of challenges in front of it, and that it's fully penetrated. That gives us a tremendous opportunity as new entrants with other high-quality services to package with it. But I agree with their point of view.”

RELATED: Charter says it has 'no interest in acquiring Sprint'

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The Wall Street Journal reported late Friday that Sprint had proposed a merger with Charter that would grant control of the combined companies to Masayoshi Son, chairman of Sprint parent company SoftBank. Charter, however, released a statement Sunday, indicating it isn’t interested. 

“We understand why a deal is attractive for SoftBank, but Charter has no interest in acquiring Sprint,” the company told FierceWireless via email. “We have a very good MVNO relationship with Verizon and intend to launch wireless services to cable customers next year.”

Like Comcast did over the spring, Charter plans to launch a bundled wireless service based on a network wholesale agreement with the No. 1 wireless carrier, Verizon, as well as its network of Wi-Fi hotspots. In May, Comcast and Charter announced a partnership to jointly develop wireless technologies and business strategies, as well as negotiate wireless M&A together. 

RELATED: Comcast and Charter christen new wireless partnership with joint Sprint talks: report

Then, in late June, it was reported that the two top U.S. cable companies had agreed to an exclusive two-month negotiating window with Sprint that would close in late July.

During Comcast’s second-quarter call, Roberts declared the MVNO deal and Charter collaboration to be enough.

“No disrespect to wireless, but that’s a tough business,” he said. “We like what we’re doing with Xfinity Mobile. It really improves what we hope it will improve. It will be a long road, and I don’t see anything in the industry where we envy a position we don’t have today. I think we have a really special company, and I wouldn’t want to do anything to change that.”

Meanwhile, speaking to a possible Comcast wireless tie-up, MoffettNathanson analyst Craig Moffett noted: “Relative valuations versus wireless are wholly unappealing.”

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