Comcast and Time Warner Cable would have a combined 27.3 million customers

Apr 28, 2014 13:57 GMT  ·  By
Comcast wants to make everyone believe it's giving up a big share of its customers
   Comcast wants to make everyone believe it's giving up a big share of its customers

Comcast has signed a deal to divest 3.9 million cable subscribers to Charter Communications. The company hopes to improve its chances of getting the Congress' approval for its $45 billion (€32.4 billion) acquisition of Time Warner Cable.

There’s only one condition for the two companies to go through with the deal – the Time Warner Cable acquisition must receive the green light. According to Comcast, regulators should take into account that the deal would lower its combined customer base below 30 percent market share for multichannel video subscribers in the United States.

There are actually a few components to the deal that Comcast wants to sign with Charter Communications. On one hand, Charter will acquire 1.4 million Time Warner Cable subscribers, causing its customer base to surge to 5.7 million, which would make it the second cable provider in the US.

Then, Time Warner Cable would transfer 1.6 million of its own customers and Charter would give back another 1.6 million customers to improve the geographic presence of each company.

To put things a bit into perspective and help you realize just how many customers Comcast is giving up, the company has an estimated 22.6 million video customers in the United States. Time Warner Cable, for its part, has about 4.7 million customers for the same segment.

Lastly, Comcast will create SpinCo, an independent company. Comcast shareholders will own two thirds of the new company, while Charter will take ownership of the rest.

“Today's Agreement follows through on our willingness to divest subscribers, while also marking an important step in our merger with Time Warner Cable. These transactions enable us to deliver meaningful value to our shareholders. The realignment of key cable markets achieved in these transactions will enable Comcast to fill in our footprint and deliver operational efficiencies and technology improvements. We look forward to working with the management teams at Time Warner Cable, Charter and the new entity to close these transactions and ensure a smooth transition for the customers and employees of all companies,” said Brian Roberts, chairman and chief executive officer, Comcast Corporation.

While this all sounds great on paper, the fact remains that Comcast has been changing its stance from year to year depending on where its interests stood. As a matter of fact, a few years back, when Comcast wanted to acquire NBCUniversal, Time Warner Cable was labeled as “competition.”

Nowadays, Comcast believes that it cannot fight against Google and Netflix unless it partners up with Time Warner Cable to create one mega company that would bump it straight to the top of the list as the biggest communications company in the United States.