[admin]

Comcast has agreed to acquire Time Warner Cable for $45.2 billion in stock, a surprise deal that combines the two largest U.S. cable companies, reports Bloomberg.

Buying Time Warner Cable, the second-largest U.S cable-TV company brings Comcast more than 11 million residential subscribers.

“This leaves Comcast as the sole king of the cable hill, with John Malone and Charter Communications hitting a brick wall in their hopes of becoming a close No. 2,” said Richard Greenfield, an analyst with BTIG LLC.

Comcast has made $65.6 billion of acquisitions over the past 10 years, according to data compiled by Bloomberg. It acquired the remainder of NBCUniversal from General Electric Co. for $16.7 billion in March, following through on the cable company’s purchase of a controlling stake in 2011.

A tie-up between Comcast and Time Warner Cable would face tough scrutiny from the FCC, according to Craig Moffett, an analyst at MoffettNathanson LLC. The merged company would account for almost three-quarters of the cable industry, data from the National Cable Television Association show.

According to GigaOm, the two companies together will control about half the triple-play services — video, voice and internet — in the U.S., with a combined 33 million broadband connections.

At end of 2013, Comcast’s average revenue per user was around $151.30 a month, while Time Warner Cable’s ARPU was around $148.70 a month, according to UBS. The video-only ARPU per month was roughly $78 a month. Both companies have a gross margin on the video business of roughly around 55 percent.

The two companies together would have about 33 million broadband connections that brought in about $18 billion in broadband revenue during 2013. It could go to about $23 billion by end of 2018.

Voice has very high gross margins – about 91 percent for Comcast and 82 percent for Time Warner Cable.

Comcast can now push its X1 platform, their cloud-based DVR, into the former Time Warner Cable homes. Comcast’s X1 lets subscribers download DVR recordings directly to a mobile device and access practically their entire TV channel lineup on IP-connected devices.

Republican FCC Commissioner Ajit Pai told the WS Journal in December that the current administration is unlikely to bless a Comcast-TWC deal, pointing to the government’s decisions to block the airline and AT&T/T-Mobile mergers. The FCC declined to comment.

Comcast believes it can negotiate better rates with content providers since it would be a multi-channel monopoly for most of the United States. Comcast already charges more for a straight HDTV off-the-air signal. Their standard settop box produces a degraded television signal that’s full of artifacts.

The NBC’s Olympic coverage could indicate the future of the combined companies. You can’t stream the games unless you are a cable subscriber – and basic cable does not count. Perhaps the next move for NBCUniversal/Comcast/Charter is to charge for air that was formerly “free” – in the WiFi band.

Comcast, Time Warner Cable, Cox, Bright House and Cablevision joined together in 2012 to share Wi-Fi hot spots to provide Internet access for their broadband customers that total about 41 million. Comcast alone has added 1 million hot spots by deploying Wi-Fi routers that beam an additional “public” hot spot available to its customers.

Comcast is enabling Wi-Fi via strand mounts and merchant access points. Tom Nagel, Comcast’s senior vice president of business development, would like to take over the “free” WiFi band, reports CED Magazine:

“I think we really want to get to 160 MHZ block channels. Today Wi-Fi is at 20 MHz channels. If I can do 160 MHZ, we can generate something close to a gigabit Wi-Fi and doing that not only makes the outdoor broadband better, but all of the in home connectivity better as well.”

See: Ad-Sponsored WiFi Initiatives from Gowex & Facebook and Comcast Creates Hotspot 2.0 National Network

Posted on Thu, 13 Feb 2014 16:44:35 +0000 at http://www.dailywireless.org/2014/02/13/...ner-cable/
Comments: http://www.dailywireless.org/2014/02/13/.../#comments