Finance

Cable Companies Invoke Verizon MVNO Deal

Offering Could Come in Early 2016 10/22/2015 11:15 AM Eastern

Cable companies, content to sit on the sidelines as the wireless wars raged around them, may be ready to step into the fray, taking advantage of a nearly five-year old deal with Verizon Communications that would allow them to resell the wireless giant’s service as early as next year.

 

In a conference call with analysts to discuss third quarter results, Verizon chief financial officer Fran Shammo confirmed that the cable operators have said they will take advantage of the MVNO agreement.

 

“We have an existing MVNO agreement and we were informed that they are going to execute on that agreement,” Shammo said on the call, declining to give further details. “Obviously the industry is moving. Cable is going to do what they are going to do and we're going to do what we're going to do.”

 

While Shammo did not identify the cable operators, it is largely believed to be Comcast and possibly Charter Communications and Time Warner Cable that have decided to go forward with the MVNO agreement.

 

In a research note, Sanford Bernstein technology analyst Paul de Sa said an offering could come from the cable companies in early 2016.

 

Comcast, Time Warner Cable and Bright House Networks – together known as SpectrumCo – agreed to sell their wireless spectrum to Verizon for $3.6 billion in 2011.  

 

In July, Comcast was said to be in talks with Verizon to amend the MVNO pact. Just what the cable giant may be planning to do on that front remains to be seen, but mobile technology has become an increasingly important vehicle for video.

 

Comcast and the other cable operators have dabbled in cellular phone service in the past – its most recent foray was Pivot, a partnership with Sprint that was abandoned in 2008.  An MVNO agreement would basically allow the cable operators to resell Verizon wireless service, which could round out a quad-play offering of video, wireline voice, high-speed Internet and wireless service. Already AT&T, which purchased satellite giant DirecTV in July, has come out with incentives to attract customers into satellite video and wireless packages.

 

De Sa added in his note that an MVNO could help Charter Communications in the regulatory approval process for its pending $78.7 billion purchase of Time Warner Cable. A wireless offering, he said, could allow advocates of the deal to argue that it “will further the public interest by enabling increased mobile competition.”

        

Want to read more stories like this?
Get our Free Newsletter Here!