So, everyone remembers how just a little while ago, Comcast pulled out from buying Time Warner right? Well now it appears that Charter is looking to purchase their competitor, Time Warner Cable, and they've agreed to acquire the company for $56.7 billion. Right now, Comcast is number one, followed by Time Warner and Charter. So if Charter buys Time Warner, they would become a pretty big competitor to Comcast. Which I'm sure Comcast wouldn't be too happy about.
After announcing this acquisition this morning, it's important to remember that Charter is also still in the process of acquiring Bright House Networks, which is a smaller competitor to Charter. With those two acquisitions under Charter's belt. They would grow their customer base to about 24 million, that's four times what they have before the acquisitions, and still just shy of Comcast's 27 million.
"With our larger reach, we will be able to accelerate the deployment of faster Internet speeds, state-of-the-art video experiences, and fully-featured voice products, at highly competitive prices," Charter's chief executive, Thomas Rutledge, said on Tuesday. "The scale of New Charter positions us to deliver a communications future that will unleash the full power of the two-way, interactive cable network."
$56.7 billion is a lot of cash, and actually, it's more than what Comcast was offering for Time Warner Cable. Which the FCC wasn't going to approve, and Comcast stepped away from buying their largest competitor. It'll be interesting to see if the FCC and DOJ allow Time Warner Cable to be bought up by Charter. While Charter is a much smaller company – even smaller than Time Warner Cable – it might get approved, but we'll see in the coming months.
Competition in broadband and the cable sector has really picked up in recent years. And that's due in part because users are streaming more TV and movies than watching them through their cable box. Thus, keeping the cable box out of the house. I'm sure I'm not the only one that doesn't have cable or satellite. This has made companies like Comcast, Charter, Time Warner Cable and even AT&T, work to figure out ways to make money and grow, while the cable industry is shrinking. Which is probably why we've seen so many acquisitions lately.