Comcast Corp, Charter Communications to announce wireless partnership

Comcast Corp and Charter Communications Inc will announce a wireless partnership today, Reuters reported citing a source familiar with the matter, as the cable providers prepared to enter a highly competitive and oversaturated market for mobile service in the US.

The partnership is aimed at cutting the significant costs of entering the wireless market, and also speeding up entry, according to the source.

Under the deal, the companies would be barred from entering into a material transaction for a year without the other company's consent, the source said. The agreement will prevent either company from tying up with a wireless carrier immediately on its own.

Reuters had reported in January that Verizon Communications Inc was interested in exploring a combination with Charter as part of a long list of acquisition targets, but no proposal had been made for a tie-up between the two companies.

The partnership had been first reported by The Wall Street Journal which gave no further details.

The Comcast/Charter talks come amid heightened expectations from a business friendly administration Trump administration and the new head of the Federal Communications Commission, Ajit Pai.

Pai had signalled a friendlier approach to big telecom mergers than his predecessor, Tom Wheeler, under former president Obama.

According to commentators, an agreement between Comcast and Charter could be a significant setback for Verizon, which had said it would be interested in acquiring either Comcast or Charter due to slowing growth in the maturing wireless industry.

With the agreement, Verizon would not be able to do a deal without the approval of Comcast and Charter for a year.

The Comcast - Charter talks will include price negotiations over phones and other equipment and making the two companies' wireless systems compatible. Comcast was expected to launch its wireless product, Xfinity Mobile, in June while  Charter had also said it would launch a wireless product.