US cable consolidation to continue, or is it?

1 Apr 2015

The fourth-largest cable provider in the US, Charter Communications, is looking to buy the sixth-largest, Bright House Networks. But that’s only if Comcast, the largest, and Time Warner Cable (TWC), the second-largest, merge.

The confusion lies in Charter’s interest in the Comcast/TWC deal. Charter had originally sought to acquire TWC itself but Comcast’s US$45bn offer blew Charter out of the water.

Charter then got in on the deal, which has yet to go through, potentially benefitting from an extra 1.4m subscribers from TWC in exchange for US$7.3bn.

Charter has claimed it will only proceed with the purchase of Bright House if the Comcast/TWC deal goes through.

If it all does pass, then Comcast would represent the largest, and Charter the second-largest, cable providers in the US.

“Bright House Networks provides Charter with important operating, financial and tax benefits, as well as strategic flexibility,” said Charter CEO Tom Rutledge.

“Bright House has built outstanding cable systems in attractive markets that are either complete, or contiguous with the new Charter footprint.”

Charter has more than 5m internet subscribers and more than 4m pay-TV subscribers in the US.

Bright House has 2.5m customers who subscribe to one or more of its services in Florida, Alabama, Indiana, Michigan and California.

Money jigsaw image via Shutterstock

Gordon Hunt was a journalist with Silicon Republic