Charter Follows Comcast With Plan to Offer Mobile Phone Serviceby
Company seeks to activate wireless pact with Verizon, CEO says
Service would link mobile phone networks with Wi-Fi hotspots
The cable industry’s march into the wireless business is starting to look like a stampede.
A day after Comcast Corp. said it will introduce a Wi-Fi-based phone service by the middle of next year, Charter Communications Inc. said it’s exploring a similar option -- potentially entering a market dominated by Verizon Communications Inc. and AT&T Inc.
Charter Chief Executive Officer Tom Rutledge said his company, like Comcast, is exercising an option to resell Verizon’s wireless services. Comcast last year invoked a 2012 agreement with Verizon to market the carrier’s mobile services as its own. Under that accord, a consortium of cable companies led by Comcast sold nationwide spectrum licenses to Verizon for $3.6 billion and secured wireless-resale rights.
Charter, the nation’s second-biggest cable company behind Comcast, wasn’t part of that deal, but inherited the rights after acquiring Time Warner Cable Inc. in May.
“We’ve told Verizon we’re interested in pursuing that agreement,” Rutledge said at the Goldman Sachs Communacopia conference in New York. “We’d like to pursue that relationship.”
Rutledge added that Charter has talked with other wireless companies about such agreements, known as MVNOs, or mobile virtual network operators. The concept was pioneered by Virgin Mobile UK in 1999 and allows a company to buy capacity on other wireless carriers’ networks and resell services under its own brand.
The plans at Comcast and Charter involve a hybrid cellular and Wi-Fi service using Verizon’s network and millions of cable Wi-Fi hotspots in peoples’ homes. For companies like Charter and Comcast, selling a wireless service could help attract or retain customers who are watching more video on their smartphones.
“We’ve talked internally about how to build out network to the capacity that it’s capable of, terrestrially and wirelessly,” Rutledge said. “To get from where we are to true mobility is going to require the use of our Wi-Fi, the relationships we have, potentially with MVNOs, and require us to build out networks at some point in the future.”