Analysts have generally reacted favorably to a broad-reaching strategic alliance carved out by the nation’s two largest cable companies as they enter the wireless business.
For his part, Deutsche Bank Analyst Matthew Niknam listed seven key benefits to the partnership, which calls for Comcast and Charter Communications to share wireless technology and best practices, as well as control each other’s major M&A endeavors in the wireless industry.
“The logic for cooperation between regional cable operators (with respect to national wireless operations) has always made sense in our view,” Niknam said in a memo sent to investors Monday. “Recent commentary from both Comcast and Charter supports our long held view that they would not be buyers of a wireless operator for at least a couple years. This agreement, while it doesn’t preclude M&A, seems to further support that the focus will be on the MVNO approach for the foreseeable future.”
Niknam then listed seven “opportunities” rendered by the deal:
- It offers national scale across a fiber-dense network footprint covering 80% of the U.S.
- The two companies will share network technology, software, product development and operational investments and expertise
- Each will dramatically increase its service footprint, allowing customers to reach across each other’s Wi-Fi networks, as well as any LTE or 5G network infrastructure built in the future
- The deal offers collaboration on spectrum procurement and any future network design and buildout
- It will enable both companies to better serve the business market with wireless services.
- It will provide better leverage and scale for procurement from vendors
- It will extend the amount of retail service locations both companies can offer
Nicknam wasn’t the only bull among media and telecom investment analysts. MoffettNathanson’s Craig Moffett remarked, “This morning’s announcement that Comcast and Charter have entered into a joint venture for wireless would only have been surprising if it hadn’t happened.”