Liberty Media Chairman John Malone is reported to have suggested that the three largest cable companies in the US could join forces and mount a bid for T-Mobile, the country's third-biggest mobile operator.
According to a report from Bloomberg, the "cable cowboy," as he has been called, believes the incoming Trump administration might be less averse than current authorities to such industry consolidation.
"Maybe the three major cable companies get together and buy T-Mobile," Malone is reported to have said during an investor event hosted by Lions Gate Entertainment, in which Malone is a major shareholder. "One could contemplate in a Trump administration Comcast and Charter could merge."
Comcast Corp. (Nasdaq: CMCSA, CMCSK) is currently the largest cable operator in the US, while Charter Communications Inc. -- which is part-owned by Liberty Media Corp. (NYSE: LMC) -- is the second-biggest company.
Number-three player Cox Communications Inc. told Bloomberg that it remains open to investments, partnerships and strategies that align with its strategies but declined to comment on the speculation.
The remarks come shortly after T-Mobile US Inc. CEO predicted that cable companies trying to enter the mobile market through so-called mobile virtual network operator (MVNO) deals would be in "full retreat" by the end of this year. (See T-Mobile CEO Sees 'Craziness' & Big Deals .)
MVNOs provide mobile services through wholesale arrangements with infrastructure owners but have historically found the going tough due to fierce competition from the same.
This is not the first time T-Mobile has attracted the interest of prospective suitors: Regulatory authorities previously opposed separate takeover attempts by rivals AT&T Inc. (NYSE: T) and Sprint Corp. (NYSE: S) out of concern about the impact on competition.
The cable sector, meanwhile, has already seen a spate of consolidation in the past year, with Charter acquiring both Time Warner Cable Inc. (NYSE: TWC) and Bright House Networks and Europe's Altice entering the US market through takeovers of smaller players Suddenlink Communications and Cablevision Systems Corp. (NYSE: CVC). (See Charter Challenges Comcast's Commercial Rule, Meet the New Charter and Altice Boasts US Cable Progress.)
Whether Trump's administration proves more amenable to consolidation remains to be seen. The president-elect, who takes charge on January 20, has previously lashed out at efforts by AT&T to acquire media business Time Warner Inc. (NYSE: TWX), decrying the proposed tie-up as "an example of the power structure I'm fighting." (See AT&T's $85B Time Warner Takeover Is a Media Game Changer.)
However, Malone is not the only individual anticipating more openness to M&A activity. T-Mobile CFO Braxton Carter told investors at a recent UBS conference that he expects to see more consolidation in the mobile industry once Trump takes office. (See T-Mobile CFO on Trump: Expect More Consolidation & More Competition.)
— Iain Morris, , News Editor, Light Reading