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Comcast, Charter Communications to Join Wireless Wings
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The intensely competitive U.S. wireless industry will soon picturize a more conflicting battleground with the joint entry of the two major U.S. cable multi-service operators (MSOs). On May 8, 2017, Comcast Corp. (CMCSA - Free Report) and Charter Communications Inc. (CHTR - Free Report) agreed to jointly work on their wireless services businesses so as to better explore their opportunities, and accelerate and enhance each other’s ability to participate in the national wireless marketplace.
For this much-hyped wireless venture, both companies have already inked a Mobile Virtual Network Operator (MVNO) agreement with U.S. telecom behemoth Verizon Communications Inc. (VZ - Free Report) to utilize its wireless network.
Moreover, both companies plan to enhance their wireless scalabilities with new ventures like the creation of common operating platforms, technical standards development, device forward and reverse logistics, and emerging wireless technology platforms to name a few. We believe such attempts to increase efficiencies should provide better options, innovative products and competitive prices for customers. Additionally, both companies’ regional wireless businesses using 4G LTE network have been considerably doing well. Hence, we look forward to the success of this joint wireless venture.
Comcast is expected to launch its new ‘Xfinity Mobile’ wireless service for its existing broadband customers over the next few weeks of this month. The company also bought $1.7 billion in wireless spectrum at a Federal Communications Commission’s (FCC) Broadcast Incentive auction in Apr 2017, to bolster its wireless services. Meanwhile, Charter Communications plans to offer wireless service in 2018.
On the other hand, the companies have agreed to work together only with respect to national mobile network operators, through potential commercial arrangements, including MVNOs and other material transactions in the wireless industry, for a year.
The companies will file an 8-K with the U.S. Securities and Exchange Commission that contains their agreement.
Price Performance
Let’s have a look at how the price performance of the cable companies – Comcast and Charter Communications – varied with time when compared with the Zacks-categorized Cable TV industry and also with the Wireless National. From Apr 6 to May 8, 2017, share prices of Comcast rose 2.8% while that of Charter Communications fell 3.9% compared with the cable TV industry’s contraction of 0.5%. The wireless industry was down 3.5% in the said time frame.
Bottom Line
The wireless venture may be aimed at retaining customers in this competitive world. Apart from a saturated multi-channel U.S. video market in the U.S., the US. pay-TV industry also remains affected by the ongoing massive consolidation between telecom and cable TV operators to strengthen their base. Meanwhile, online video streaming service providers such as Netflix Inc. (NFLX - Free Report) , Hulu.com, YouTube etc., pose severe competitive threats to cable TV operators because of their extremely cheap source of TV programming, which is in vogue even in volatile economic conditions.
Notably, Comcast Corp. is the leading cable MSO in the U.S. and Charter Communications became the second largest cable MSO in the U.S., following the twin buyout of Time Warner Cable and Bright House Networks. At present, Comcast carries a Zacks Rank #3 (Hold) while Charter Communications is a Zacks Rank #5 (Strong Sell) company.
Today you are invited to download the full, up-to-the-minute list of 220 Zacks Rank #1 "Strong Buys" free of charge. From 1988 through 2015 this list has averaged a stellar gain of +25% per year. Plus, you may download 220 Zacks Rank #5 "Strong Sells." Even though this list holds many stocks that seem to be solid, it has historically performed 6X worse than the market. See these critical buys and sells free >>
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Comcast, Charter Communications to Join Wireless Wings
The intensely competitive U.S. wireless industry will soon picturize a more conflicting battleground with the joint entry of the two major U.S. cable multi-service operators (MSOs). On May 8, 2017, Comcast Corp. (CMCSA - Free Report) and Charter Communications Inc. (CHTR - Free Report) agreed to jointly work on their wireless services businesses so as to better explore their opportunities, and accelerate and enhance each other’s ability to participate in the national wireless marketplace.
For this much-hyped wireless venture, both companies have already inked a Mobile Virtual Network Operator (MVNO) agreement with U.S. telecom behemoth Verizon Communications Inc. (VZ - Free Report) to utilize its wireless network.
Moreover, both companies plan to enhance their wireless scalabilities with new ventures like the creation of common operating platforms, technical standards development, device forward and reverse logistics, and emerging wireless technology platforms to name a few. We believe such attempts to increase efficiencies should provide better options, innovative products and competitive prices for customers. Additionally, both companies’ regional wireless businesses using 4G LTE network have been considerably doing well. Hence, we look forward to the success of this joint wireless venture.
Comcast is expected to launch its new ‘Xfinity Mobile’ wireless service for its existing broadband customers over the next few weeks of this month. The company also bought $1.7 billion in wireless spectrum at a Federal Communications Commission’s (FCC) Broadcast Incentive auction in Apr 2017, to bolster its wireless services. Meanwhile, Charter Communications plans to offer wireless service in 2018.
On the other hand, the companies have agreed to work together only with respect to national mobile network operators, through potential commercial arrangements, including MVNOs and other material transactions in the wireless industry, for a year.
The companies will file an 8-K with the U.S. Securities and Exchange Commission that contains their agreement.
Price Performance
Let’s have a look at how the price performance of the cable companies – Comcast and Charter Communications – varied with time when compared with the Zacks-categorized Cable TV industry and also with the Wireless National. From Apr 6 to May 8, 2017, share prices of Comcast rose 2.8% while that of Charter Communications fell 3.9% compared with the cable TV industry’s contraction of 0.5%. The wireless industry was down 3.5% in the said time frame.
Bottom Line
The wireless venture may be aimed at retaining customers in this competitive world. Apart from a saturated multi-channel U.S. video market in the U.S., the US. pay-TV industry also remains affected by the ongoing massive consolidation between telecom and cable TV operators to strengthen their base. Meanwhile, online video streaming service providers such as Netflix Inc. (NFLX - Free Report) , Hulu.com, YouTube etc., pose severe competitive threats to cable TV operators because of their extremely cheap source of TV programming, which is in vogue even in volatile economic conditions.
Notably, Comcast Corp. is the leading cable MSO in the U.S. and Charter Communications became the second largest cable MSO in the U.S., following the twin buyout of Time Warner Cable and Bright House Networks. At present, Comcast carries a Zacks Rank #3 (Hold) while Charter Communications is a Zacks Rank #5 (Strong Sell) company.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Best & Worst of Zacks
Today you are invited to download the full, up-to-the-minute list of 220 Zacks Rank #1 "Strong Buys" free of charge. From 1988 through 2015 this list has averaged a stellar gain of +25% per year. Plus, you may download 220 Zacks Rank #5 "Strong Sells." Even though this list holds many stocks that seem to be solid, it has historically performed 6X worse than the market. See these critical buys and sells free >>