Charter Communications (NASDAQ: CHTR) CEO Tom Rutledge said the cable company is looking to launch some kind of mobile wireless product and is willing to explore working with T-Mobile US (NYSE:TMUS) or any other wireless carrier.
Charter, which in May launched a $56.7 billion bid to buy rival Time Warner Cable (NYSE: TWC), already has wireless as a "component of our service already," Rutledge said on the company's second-quarter earnings conference call, according to a Seeking Alpha transcript of his remarks.
When asked about partnering with a wireless carrier, Rutledge said: "But the thrust of your question is, should we have a mobile product and the answer is yes, we should ultimately figure out how to create our service infrastructure everywhere we are and where our customers are."
In the meantime, the Charter chief said that the MSO is continuing to roll out its Wi-Fi network and that the bulk of wireless traffic on smartphones goes over Wi-Fi today. "And so I think there are opportunities, business opportunities to create mobility for us whether that's with T-Mo or any other provider for that matter," he said. "I think opportunities exist there and people are trying to figure out the right business models to do that."
T-Mobile CEO John Legere said last week it would be logical for T-Mobile to partner with a cable player like Comcast (NASDAQ: CMCSA). On T-Mobile's earnings call, Legere said: "But it's just logical; if you step back and start from a consumer and then the consumer says, 'Hey, wait a minute. I have Comcast and I have T-Mobile. Why don't these guys do something together to provide a seamless set of capabilities to us?'"
Rutledge said AT&T's (NYSE: T) new converged product offering, bundling wireless with DirecTV satellite TV service, "is a good marketing idea for them," but that customers of other wireless products can use Charter's mobile applications to watch TV on their smartphone today.
Charter doesn't have a large Wi-Fi hotspot network currently, but TWC and Bright House do. Both cable companies are members of the CableWiFi consortium, which pools together around 400,000 indoor and outdoor hotspots around the country built by five of the nation's largest cable companies. It's unclear if Charter will join the consortium, though Charter has committed to building 300,000 out-of-home Wi-Fi hotspots if the deal goes through.
Charter and its backers have talked about a wireless option before. In June, Liberty Media Chairman John Malone laid out the reasons he supports the proposed Charter/TWC deal pointing specifically to the possibility of a Wi-Fi calling service as one outcome.
Claiming that the merger will "wake up a sleepy cable company that was treading water and pleasing shareholders with buybacks," Malone said the combined Charter and TWC could introduce a Wi-Fi-based wireless service that would compete with AT&T and Verizon (NYSE: VZ). Liberty is Charter's largest shareholder. "The concept that Comcast, a greatly enlarged Charter and Cox could together offer a Wi-Fi-optimized connectivity service with a default to a Verizon MVNO is interesting," Malone said.
Charter would get access to a Verizon Wireless MVNO agreement if it is able to secure regulatory approval for and close the Time Warner deal, but the Wall Street Journal reported last week, that, according to unnamed sources, Charter thinks the agreement is more suited for the voice era than for mobile data.
- see this Seeking Alpha transcript
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