Verizon and Charter have discussed a potential merger that would combine two of the country’s biggest Internet providers, according to a Wall Street Journal report today.
“Verizon CEO Lowell McAdam has made a preliminary approach to officials close to Charter,” and Verizon is “working with advisers to study a potential transaction,” the report said, citing “people familiar with the matter.” It’s still unclear whether Charter’s top executives are interested in a merger.
Spokespeople for Verizon and Charter both declined comment when contacted bytoday.
If the companies do merge, they would create a mega-giant. Verizon’s wireless division is the US’ largest mobile carrier, with more than 140 million retail and wholesale connections. Verizon’s wireline division has more than 7 million Internet subscribers over its fiber and DSL networks. Charter, meanwhile, bought Time Warner Cable and Bright House Networks last year in a merger that made it the second largest US cable company after Comcast. Charter has more than 22 million Internet subscribers. A combined Verizon/Charter would surpass Comcast’s total of 24 million fixed Internet subscribers.
The New York Post recently reported that Verizon “is weighing the acquisition of a cable company to help grow demand for its wireless data products.” With a cable subsidiary boosting its home Internet and TV subscriber base, Verizon would be able to sell wireless-and-wireline bundles to many more consumers. Charter has wireless ambitions of its own: the cable company was already considering the possibility of becoming an MVNO by reselling Verizon Wireless service, and it has built a network of public Wi-Fi hotspots.
Regulatory approval from the Federal Communications Commission and Department of Justice would be no sure thing. In recent years, US regulators have blocked or discouraged mergers of AT&T and T-Mobile USA, Sprint and T-Mobile USA, and Comcast and Time Warner Cable.
But those deals were proposed under President Barack Obama. While President Donald Trump talked tough on telecom and media mergers on the campaign trail, his early appointments suggest the government will be more friendly to mergers.
Disclosure: The Advance/Newhouse Partnership, which owns about 13 percent of Charter, is part of Advance Publications. Advance Publications owns Condé Nast, which ownsTechnica.