Massive Merger Falls Through

Charter Communications just announced that it has no interest in acquiring Sprint, only days after Wall Street announced the proposed deal. This acquisition would have created a new conglomerate under the control of Masayoshi Son, chairman of the Japanese megacompany Softbank, which owns sprint. Charter said in a statement that they see no reason to cut ties with Verizon, and intend to launch wireless services to cable companies next year.

According to Reuters.com, the telecom industry is preparing for a massive wave of M&A deal activity. Analysts believe that mergers between cable companies and wireless carriers makes sense as the distinction between wireless and broadband activity is blurred more and more each day. The relationship between the two industries as follows. Cable providers have that wireless providers need to accommodate the growing amounts of data that customers are now using. On the other hand, cable providers could benefit from the expertise of wireless providers as they begin to launch their own wireless services.

This merger, had it gone through, would have been very disruptive to the industry due given Charter’s relationship with Verizon.


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