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Industry News - June 2015

By: Jesse Cryderman

Unless you were sleeping under a rock last month, you heard the big news: Charter Communications intends to purchase Time Warner Cable and consolidate it, along with Bright House Networks, into one monolithic multi-system operator (MSO). Charter moved quickly on the deal following the collapse of the Comcast/TWC merger. Charter may have a better chance with regulators, since it's a smaller player, and the combined companies would have the muscle and size to truly compete with Comcast.

The consolidation of Charter, TWC, and Bright House under one roof would create a single entity that serves nearly 24 million customers across 41 states. According to Charter, the efficiencies achieved through consolidation would drive investment in network evolution, which "will result in faster broadband speeds, better video products, including more high definition channels, more affordable phone service and more competition, for consumers and businesses."

The combination of Charter, Time Warner Cable and Bright House will create a leading broadband services and technology company serving 23.9 million customers in 41 states. The announced transactions will drive investment into the combined entity's advanced broadband network, allow for wider deployment of new competitive facilities-based WiFi networks in public places, and the footprint expansion of optical networks to serve the large marketplace of small and medium-sized businesses. This will result in faster broadband speeds, better video products, including more high definition channels, more affordable phone service and more competition, for consumers and businesses. 


The so-called "New Charter" would be led by current Charter CEO Tom Rutledge. 

"The teams at Charter, Time Warner Cable and Bright House Networks are filled with the innovators of our industry," said Tom Rutledge, President and CEO of Charter Communications, in a statement. "Representatives of each of these companies have invented some of the most revolutionary communications products ever created; innovations like video on demand, VOIP phone service, remote storage DVR, cable TV through an app, downloadable security and the first backward-compatible, cloud-based user interface. That spirit of innovation will live on, and it will create real benefits and great long-term value for the customers, shareholders and employees of all three companies."  

Charter isn't the only company making headlines with acquisitions. Telefonica closed its acquisition of GVT last month, becoming the largest operator in Brazil in terms of both revenue and customer base. Elsewhere, Nokia Networks scooped Eden Rock to expand its SON portfolio, chipmaker Avago purchased rival Broadcom, and TiVO bought Cubiware. And, of course, another acquisition made headlines:

Verizon to buy AOL

Verizon is hoping to extract value from one of the oldest brands in digital, which mailed us countless CDs promising free access time, popularized the phrase "you've got mail!," and is still probably how your grandmother gets online. Yes, big V is creeping to the front of the alphabet to buy AOL for more than $4 billion in order to capitalize on AOL's subscription content library (it owns Huffington Post and TechCrunch, to name a few) and advertising business. 

Lowell McAdams, CEO, Verizon, commented on his company's strategy. "At Verizon, we've been strategically investing in emerging technology, including Verizon Digital Media Services and OTT, that taps into the market shift to digital content and advertising. AOL's advertising model aligns with this approach, and the advertising platform provides a key tool for us to develop future revenue streams."



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