Verizon grabs hold of potential merger which could give it a boost in the US telecoms industry.
Broadband telecommunications provider, Verizon and cable company Charter Communications are allegedly looking to merge.
Charter is one of more than 10 other options that Verizon has reportedly considered merging with, all of which include media companies, network and cable operators and fibre-optic services, according to Bloomberg.
Following the news of the potential deal, pre-market trading figures show a surge in Charter’s shares, which increased by almost 10 percent to total $341.50, compared to Verizon which fell by 2.5 percent.
Combining Verizon, which has 114 million wireless subscribers and Charter which has 17 million cable customers and 21 million broadband customers, would drive a boost in the communications sector within the US and also position Verizon as the second largest cable provider in the US.
This will be provided by the largest wireless and internet subscriber base from Charter, which is now one of the largest US internet and cable TV providers following its acquisition of Time Warner Cable in 2016.
Craig Moffett, Analyst at MoffettNathanson LLC, said in a feature on Bloomberg TV: “This is the beginning of what everyone has been anticipating as the biggest mating dance in telecommunications that any of us have ever seen.” This is one that analysts have described as a significantly huge merger in the industry.
Verizon’s deal with Yahoo was recently delayed due to the cyber-attack breaches that took place in August and November 2016; this has forced the company to delay closing the acquisition till the second quarter of 2017.This along with other issues has been identified to cause possible challenges in Verizon’s wireless business.
Verizon has previously been reported to face challenges regarding the future of its wireless services, whereby its search for a large deal may be classified as a potential boost to its business strategy.
Cable and wireless companies have continued to explore closer ties in order to strengthen their market positions. Examples of such acquisitions include AT&T and Time Warner, which began talks of a merger in October 2016.
Comcast and Charter are also in talks to enter the wireless market by re-selling Verizon’s services.