Charter and Cox have created the largest cable operator in America just as the word “cable” is losing its traditional meaning as a term for television. The deal is less about protecting television and more about building a national connectivity platform capable of competing with wireless operators, streaming platforms and satellite broadband.
Charter Communications has completed its previously announced transaction with Cox Communications and the acquisition of Liberty Broadband Corporation to create the leading broadband and video company in the United States. The Cox name will now be replaced with the Spectrum brand, although the parent company plans to change its name to Cox Communications.
“The addition of Cox to the Spectrum footprint is one that can be celebrated by customers, employees and investors alike,” said Chris Winfrey, the president and chief executive of Charter. “Together, we will bring the best products, at the best price, coupled with the highest level of customer service to more customers across our expanded 45-state Spectrum footprint.”
“The market has changed considerably over the past decade, and regional providers like Spectrum are competing with national and even global connectivity and entertainment companies. Today, with expanded scale, we are better positioned to compete and continue investment in our products and service, tools and platforms, and to further the capability and reach of our Spectrum Fiber Broadband Network.”
“When Liberty first invested in Charter more than a decade ago, we saw an opportunity to build scale behind a great management team and operating model,” said John C Malone, the chairman of Liberty Broadband. “The combination of Charter and Cox creates a stronger, more competitive company to further invest and innovate, while giving Liberty Broadband shareholders a direct interest in its future.”
The combined company is being described as the largest cable operator in the US and one of the largest broadband and video providers. It will serve around 37–38 million customers, pass more than 70 million homes and businesses, and operate across 45 states. It will have about 38 million customers, the majority of which are for broadband, with about 14 million video customers.
The traditional narrative has been that cable companies are in decline because video subscribers are moving to streaming. Yet the response from the cable industry is not retreat but consolidation.
The rationale is that the future cable company is no longer primarily a televison distributor. It is a broadband network operator that also packages video, mobile, Wi-Fi, streaming aggregation, and connected entertainment.
Charter’s own language is revealing. It repeatedly describes itself as a “broadband and video company” rather than a cable company.
The deal is less about protecting television and more about building a national connectivity platform capable of competing with wireless operators, streaming platforms and satellite broadband. The strategic asset it the network infrastructure.