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Charter Sizes Up Verizon Wireless Opportunity

After sitting on the wireless sidelines for years, Charter Communications Inc. may finally be looking to get in on the mobile action.

That apparent change of heart comes just days after Comcast Corp. (Nasdaq: CMCSA, CMCSK), Bright House Networks and Time Warner Cable Inc. (NYSE: TWC) struck a groundbreaking, multi-faceted deal with Verizon Wireless that will let each side sell the other's services starting in 2012 and, about four years from now, enable the MSOs to resell cable-branded services on the Verizon Wireless network under an MVNO model. (See MSOs Sell AWS Spectrum to Verizon for $3.6B and Verizon Wireless: Cable’s New BFF.)

Despite not having any spectrum to toss into the pot, Charter is interested in the co-marketing end of that deal.

That agreement gives those MSOs a partnership that's similar in terms of the sales channel opportunities Charter now has with Dish Network LLC (Nasdaq: DISH), which is reselling Charter high-speed voice and Internet service, Charter CEO Mike Lovett said Monday at a UBS AG investor conference in New York.

He also sees such a partnership as mutually beneficial, noting that 60 percent of Charter's footprint overlaps AT&T Inc. (NYSE: T), which is touting its ability to mix, bundle and integrate wired and wireless services. "We [Charter and Verizon Wireless] have kind of a common objective there," Lovett said.

It would also represent a significant strategy shift for Charter, which has restrained itself from joining its peers in a range of recent wireless partnerships with the likes of Sprint Corp. (NYSE: S) and Clearwire LLC (Nasdaq: CLWR). (See Comcast, TW Cable to Halt Clearwire Sales and MSOs Pivoting Away From Sprint JV.)

— Jeff Baumgartner, Site Editor, Light Reading Cable

kaps 12/5/2012 | 4:47:13 PM
re: Charter Sizes Up Verizon Wireless Opportunity

I still don't see the consumer appeal of having a wireless service available to purchase when I pick a cable/TV provider. Until the cableco in question can come up with some kind of compelling reason -- say, a free tablet app that lets me view the same cable shows wherever I roam -- what is the point?


And if I am the wireless provider, you've got to wonder how well the cableco is going to sell your service. Just what the folks in the store or on the phone need -- another SKU they know little to nothing about. 

kaps 12/5/2012 | 4:47:13 PM
re: Charter Sizes Up Verizon Wireless Opportunity

I still don't see the consumer appeal of having a wireless service available to purchase when I pick a cable/TV provider. Until the cableco in question can come up with some kind of compelling reason -- say, a free tablet app that lets me view the same cable shows wherever I roam -- what is the point?


And if I am the wireless provider, you've got to wonder how well the cableco is going to sell your service. Just what the folks in the store or on the phone need -- another SKU they know little to nothing about. 

jdbower 12/5/2012 | 4:47:12 PM
re: Charter Sizes Up Verizon Wireless Opportunity

The only bonus I can see as a consumer is single-source billing.  Verizon offers me a single bill for Internet, Phone, TV and Mobile (well, if I had pay TV service).  If Charter can do the same that's the one bonus I can see as a consumer is one less check to write.  OK, one less automatic debit from my checking account which makes it slightly less compelling but still...


Similarly Verizon can now offer billing for TV services in non-FiOS areas, but this may just further slow FiOS rollout.

paolo.franzoi 12/5/2012 | 4:47:10 PM
re: Charter Sizes Up Verizon Wireless Opportunity

 


You do know that the "FiOS rollout" has been completed and announced to be completed by Verizon right?


All they are doing now is fill in...they may need more OLTs over time but the number of FiOS COs is supposed to be at 100%.


seven


 

^Eagle^ 12/5/2012 | 4:47:08 PM
re: Charter Sizes Up Verizon Wireless Opportunity

Seven,


now that FIOS is "essentially" complete, what do you think Verizon will do with it or do next?


keep the asset and make limited further investment and see if they can recoup the costs and make some profit out of it?


or get it all prettied up for an eventual spin out or sell off?  Maybe sell it to Comcast or Charter or someone.....  solve the issue of support /upgrades / customer service with non union staff via the cable co and solve the continual fight for content. 


or be thinking about what Verizon really wants the merged wireless / wireline network to look like and pause while they think things through?


or be thinking about a "2nd" phase that would be faster, reach more places they never brought FIOS, go more into competitor's territory, or any of the above for a next phase?


some new grand vision of a converged network? or.......


Of course there are other options.


But I have to believe that Verizon is exploring all these options with regards FIOS.


any thoughts you might have would be welcomed


sailboat

paolo.franzoi 12/5/2012 | 4:47:06 PM
re: Charter Sizes Up Verizon Wireless Opportunity

sailboat,


First off if nobody has noticed, Verizon is dumping their non-FiOS properties as fast as possible.  They stated that at the beginning and have no plans to build it out to all of their subs.  There may be the odd exception, but their plan always was to have a FiOS only network and dump their copper. 


What I think is funny is that people here think FiOS is this huge problem.  I think it is a huge win.  They already spent the bulk of the of Capex and are basically only spending now on new customers.  They achieved their goal of getting the ongoing problem rate on FiOS to be like POTS.  They achieved their goal of getting more flexibility in the workforce.s.


The questions really are:  What is the landline service that will drive people to more bandwidth than cable can provide on average?  Is there an effective way to use our video service better than the cable guys?


Selling it is a problem.  In terms of merged, wireless/wireline...I assume you mean Voice.  And FiOS is heading to VoIP switches to deliver POTS service (that was built in to all but the very first BPON ONTs they bought).


So what has FiOS done for Verizon?  Stop the bleeding to Cablevision and provide a platform to hold down the consumer access side of the business.  I think as a standalone business, they probably should not have done it in the first place.  But at this point, the big investment is done.  Ride the cash in and use it to fund other things.


You know the last time I looked at the queue depths on the various uplinks on OLTs, they were really minimal.  Basically, the whole thing is massively empty.  So, what services can they offer to fill up those pipes.


I also think that FiOS is a business lesson for equipment companies.  I see many that have not learned...THERE IS NO ONGOING FiOS BUSINESS.  If you didn't win already, there is no 2nd chance to get in.  This is the new way of buildouts.  Win up front or don't bother.  Over the many years, there were 2nd generation, 3rd generation etc. products that took over the same spot in the network.  That does not happen now.  You win the 3G.  Poof done, you won.  Now the 4G/LTE network happens.  You win or lose and then are done.  There is no 2nd generation 3G business.  In older product lines, procuremnent occurred over years and generations.  No longer.


seven


 

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