Charter, Comcast hint at mobile activities, but details remain scarce

Cable companies including Comcast (NASDAQ: CMCSA) and Charter Communications (NASDAQ: CHTR) continue to promise that they will eventually enter the mobile industry -- but what exactly they plan to do remains unclear.

In separate appearances at a recent UBS investor meeting, top executives from Comcast and Charter both promised they plan to carefully look at the mobile market.

"I think trying and experimenting in a lot of different ways and keeping our minds open about the fact that it is a changing environment is important," said Comcast CFO Mike Cavanagh, according to a Seeking Alpha transcript of his comments. "And I feel good about the team that I have become part of that's the attitude of how we are looking at the shifting landscape."

Charter's CEO Tom Rutledge offered a similarly vague outlook on the company's plans for mobile. "Ultimately the mobile platform is something that we're going to want to reach to," he said, without providing details. "We do want to have the customer relationship when people are moving."

Comcast during its third quarter earnings report confirmed that it has activated the MVNO option it has with Verizon (NYSE: VZ), an option that stems from Comcast's participation in a consortium of cable companies that sold spectrum to Verizon in 2012. Comcast is expected to begin testing MVNO services in the second quarter.

"What we have decided is that it's certainly worth at this point triggering the MVNOs that we can work on exploring what kind of offering we could bring and go deeper to learn and experiment," Cavanagh said at the UBS conference. "That's the state of play on the MVNO. And that sits in the context of having been big believers in Wi-Fi."

Added Cavanagh: "It will take time to draw any conclusions from what we are now going through."

Interestingly, Charter's Rutledge also said the company will have an MVNO option with Verizon as part of its purchases of Time Warner Cable and Bright House Networks. Both TWC and Bright House were part of the cable company consortium that sold spectrum to Verizon in 2012. Charter expects to close its acquisitions of TWC and Bright House in the next few months.

"We'll be stepping into an MVNO relationship with the contract in Time Warner and Bright House," Rutledge said during his appearance at the UBS conference. "And so we need to think through our wireless strategy as we go forward. There's an auction coming up. It's difficult for us to participate in that right now because we're not sure when we'll close [the TWC and Bright House acquisitions]. We're not sure of a lot of things."

Added Rutledge: "We're certainly interested in the future of our relationship to spectrum and how we might get spectrum. And we're interested in how we transform from a stationary wireless to a mobile wireless kind of business, and we think there's more than one path to that."

Cable's efforts in mobile could well pay off. According to recent research from the financial analysts at New Street Research, a cable company like Comcast could entice up to 20 percent of its customer base to switch to its own MVNO service within five years of moving into the wireless industry.

Indeed, some executives in the mobile industry are already prepared for the possible incursion by cable players. "Cable companies are going to enter the wireless world," predicted Verizon CFO Fran Shammo in his own appearance at the UBS event. "We just have to be prepared to deal with that."

For more:
- see this Charter webcast
- see this Seeking Alpha transcript

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