Liberty's Malone Eyes Cable Takeover of T-Mobile – Report

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.

For more fixed broadband market coverage and insights, check out our dedicated Broadband content channel here on Light Reading.

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, Circle me on Google+ Follow me on TwitterVisit my LinkedIn profile, News Editor, Light Reading

Alison_ Diana 1/12/2017 | 12:16:35 PM
Re: Cross M&A I've noticed that, too, Brian: Rumors become reality, demonstrating a lot of string-pullilng, propoganda and testing of the waters before execs from the two merging or acquired/acquiree actually speak. It would be interesting to look back say five years and track the rumor mill vs. what actually happened (and their success rate). 
DanJones 1/12/2017 | 11:07:09 AM
Re: Cross M&A Legere calls it "Vericast"



DanJones 1/12/2017 | 11:07:09 AM
Re: Cross M&A Legere calls it "Vericast"



inkstainedwretch 1/11/2017 | 7:07:02 PM
Cross M&A And it's worth mentioning that some Wall Streeters have already decided that Verizon-Comcast would be a good merger. Those things tend to take on a life of their own -- Comcast didn't really want Time Warner Cable that badly, but it still made the bid in part because Wall Street was encouraging it. Merger fantasies can end up manifesting.

If I were Charter, I wouldn't want to go up against that combination. Proposing a Comcast/Charter/Cox takeover of T-Mobile might make sense all on its own, but it would also give Comcast incentive to keep Verizon at arm's length.

The interesting thing is how these wireless/cable mergers might affect competition. The big cable operators will not compete with each -- at least not so far. Verizon and AT&T do compete with FiOS and U-verse, but the rollouts of both were circumscribed, and were always going to be. For years and years and years, both VZ and T have been promising they'd become fully competitive (geographically speaking) with wireless broadband, but it will be years and years more before theymake good on that promise in any meaningful way.

I can see where further consolidation could have a big downside for competition, but I'd be interested to see an evaluation of wireless/cable mergers to see if there's a chance that competition might actually increase. I wouldn't bet on it, but I'd like to see the argument.

-- Brian Santo
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