Meet the New Charter

Bright House Networks - $10.4 billion

Figure 1: Subscriber Numbers Source: Data derived from companies' most recent earnings reports as well as numbers listed for Bright House Networks in Charter transaction materials.

Figure 2: Combined Footprint Source: Charter transaction materials

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Conditions imposed by regulators

Major impacts

Competing Pay-TV ecosystems: Comcast Corp. (Nasdaq: CMCSA, CMCSK) has created a dominating pay-TV ecosystem with initiatives like its X1 platform and the birth of the RDK set-top software stack. A new and larger Charter will create a significant competitive force to the Comcast technology and business approach in the cable market. (See Shaw Licenses X1, Proves Comcast's Influence.)

A strategic roadmap reapplied: Charter CEO Tom Rutledge has repeatedly said he plans to use the same strategies that he implemented successfully with legacy Charter in the newly acquired markets. These strategies include migrating systems to all-digital video delivery and extending the rollout of Charter's cloud-based Spectrum TV guide. (See Rutledge Sets Stage for New Charter.)

Business services boost: Time Warner Cable will give Charter a major boost in the business services market, bringing with it significant fiber deployments and connections to commercial buildings. Combined business services revenue for Time Warner Cable and legacy Charter was $4.4 billion in 2015. (See Charter Plans Business Services, Wireless Push .)

WiFi everywhere: Rutledge has committed to investing "significantly in out-of-home WiFi," and the combination of Time Warner Cable and Bright House Networks should immediately add close to 100,000 hotspots to Charter's existing footprint, if not more. Charter will also gain access to hundreds of thousands of hotspots through the CableWiFi consortium, and can take advantage of the same MVNO agreement with Verizon Communications Inc. (NYSE: VZ) that Comcast has already activated. (See Analysts More Than Bullish on Comcast MVNO.)

Reducing costs through restructuring: The price on Charter's acquisitions can only be supported with the help of cost-cutting measures. Among them, it appears Charter will shut down several Time Warner Cable facilities in: Charlotte, N.C.; Herndon, Va.; and Syracuse, N.Y. A Bright House Networks Network Operations Center in St. Petersburg, Fla. is reportedly also on the block. (See Charter Jumps Gun on TWC Restructuring.)

— Mari Silbey, Senior Editor, Cable/Video, Light Reading