Rumor mill: Verizon pondering purchase of Comcast or Charter

Verizon store front (Monica Alleven)
Rumors of a cable-telecom merger go back a few years, to Verizon offloading FiOS assets to Frontier Communications, but are heating up again ahead of a Trump administration.

Verizon CEO Lowell McAdam is seriously considering buying one of the two biggest cable companies in order to support his wireless giant’s 5G buildout, the New York Post said, citing its usual collection of unnamed sources.

According to the paper, McAdam told friends at the Consumer Electronics Show in Las Vegas two weeks ago that he wants a cable company. 

“They need it for 5G,” a second source told the Post. 

Sponsored by Google Cloud

Webinar: Remote Post Production In The Cloud

Video production companies across the world have traditionally been tethered to physical facilities, but with the advent of covid-19, remote post production capabilities are more important than ever. Join this webinar to learn more about how video producers can utilize Google Cloud infrastructure, along with partner applications, to develop a remote post production suite that brings your artists and editors together, no matter where they are.

RELATED: Comcast-Verizon merger would deliver ‘significant synergies,’ UBS analyst says

Amid the backdrop of a Trump administration that would figuratively approve previously unimaginable mergers, the idea of Verizon buying either Comcast or Charter Communications got put in the ear of the telecom industry back in November, when UBS analyst John Hodulik first seeded the concept in an investor note

“We have long believed that secular changes in technology and usage would lead to the convergence of the cable and wireless industries,” Hodulik said. “The transformation of the internet into a mobile-first platform combined with the rapid migration of video from proprietary networks to digital and the rise in competitive pressure this entails increases the value of an integrated fixed and wireless service to cable providers. Densification of wireless networks required to meet the needs of video-centric subscribers increases synergies of cable-wireless combinations and provides the springboard for 5G-based services. A roll-back of Title II re-classification could further increase incentives for cable.”

The speculation picked up steam when McAdam, speaking at a J.P. Morgan investor event in mid-December, said the purchase of Charter by Verizon makes “industrial sense."

Actually, the cable rumors go back a ways, to Verizon offloading FiOS assets to Frontier Communications, which some analysts believed was a strategic attempt to clear a path for the acquisition of cable distribution assets.

Notably, one of the Post’s sources limited the speculation to Comcast and Charter, pointing out that Altice USA’s footprint is too small to help Verizon. 

Suggested Articles

Early reactions to Instagram's Reels, Facebook's answer to TikTok: no creativity seen, quite possibly no creativity needed.

Quibi subs complain about the quality of the shows, the ease of use of the platform and issues with buffering and speed, according to Kantar.

Roku found itself with more viewers than ever in its second quarter but still no profits.