Charter shoots down the idea of acquiring Sprint
Cable television giant Charter Communications Inc. shot down the prospect of a merger with Sprint, despite interest by the wireless phone operator’s parent, SoftBank Group Corp. of Japan, to create a mammoth new telecommunications company in the U.S.
“While we understand why a deal is attractive for SoftBank, Charter has no interest in acquiring Sprint,†Charter spokesman Alex Dudley said in a statement emailed to The Times on Monday.
Charter is one of the nation’s largest Internet and pay-TV providers, and is the dominant provider in the Los Angeles region, with more than 1.5 million customers. The Stamford, Conn., cable company also has a partnership with Verizon Communications Inc. and plans to use Verizon’s networks to introduce a Spectrum-brand wireless phone service.
“We have a very good … relationship with Verizon and intend to launch wireless services to cable customers next year,†Dudley said.
The Wall Street Journal first reported interest by Kansas City-based Sprint in combining with the larger Charter, and Charter’s rejection of a potential tie-up.
The proposed deal would have created a new entity that would have been controlled by Sprint Chairman Masayoshi Son and his company, SoftBank. Sprint is the nation’s fourth-largest wireless network and it has struggled to compete against rivals Verizon, T-Mobile and AT&T, which is in the process of buying media company Time Warner Inc.
As Sprint’s core wireless phone business has matured, the company was hoping to join the parade of consolidation that’s rampant in the telecommunications industry. The competition is fierce, and companies have resorted to cutting prices in order to encourage people to ditch rivals’ plans and sign up for their service.
But Charter is already laden with debt following its acquisition last year of Time Warner Cable. In addition, a tie-up between Sprint and Charter would have introduced other complications because of a pact between Charter and the nation’s largest cable company, Comcast Corp.
Charter and Comcast jointly agreed this spring not to engage in merger or acquisition talks with another wireless company for at least a year without each other’s participation or go-ahead.
Cable operators have been seeking a way to enter the wireless business for years; as Americans increasingly shift their Internet consumption to mobile devices and take their data usage to go. Traditional cellular carriers such as AT&T and Verizon have stood to benefit from the shift at the expense of home Internet providers such as Comcast and Charter.
But the cable industry has aggressively added public Wi-Fi hotspots to enable their customers to access mobile broadband.
Comcast Chief Executive Brian Roberts said duriing an earnings call last week that his company is content with its current strategy, hinting that no major deals were in the offing. Comcast also has an agreement with Verizon to offer Comcast/Xfinity-branded mobile phone service to its current subscribers.
Sprint had also reportedly been courting T-Mobile about an acquisition, according to the Journal. Sprint declined to comment on Charter’s assertion that it was not interested in pursuing an acquisition.
Charter’s shares jumped 5.8% on Monday to $391.91.
Times staff writer Rachel Spacek and Washington Post staff writer Brian Fung contributed to this report.
UPDATES:
1:55 p.m.: This article was updated with Charter stock’s closing price.
11:30 a.m.: This article was updated throughout with Times staff reporting.
This article was originally published at 9:25 a.m.
