In addition, Charter will undergo a tax-free reorganization and form a new holding company, New Charter. And Comcast will spin off a company that will operate systems serving approximately 2.5 million existing Comcast customers. Comcast shareholders will own 67% and New Charter will acquire the remaining 33% by issuing New Charter stock to Comcast shareholders.
As a result, a combined Comcast/Time Warner will have a post-merger subscriber total that is below 30% of the national MVPD subscribers. Comcast says it expects the merger to generate $1.5 billion in operating efficiencies.
First Quarter Check-In
All three of these cable operators recently issued first-quarter financial reports. Here are some of the tech highlights from the earnings calls:
TWC noted that it deployed its cloud-based guide on an additional 1 million set-top boxes during the quarter, bringing the total to 4.3 million. The company has plans to hit the 6 million mark in the coming months.
Also mentioned was TWC's recent HotSpot 2.0 announcement, which among other things will allow customers to log on once to the public WiFi network and then automatically connect whenever their device is in range. TWC CEO Rob Marcus said the initiative will "make our ever expanding WiFi network more secure and easy to use."
As for TWC Maxx, the company's plan to reinvent the customer experience, Marcus said it is up and running in NYC and Los Angeles. The former market is 100% digital, while the digitization process has begun in the latter market. Speed increases (50 Mbps to standard customers and 300 Mbps to high-end subscribers) have been implemented in two hubs in each market.
During its call, Charter reported it is 40% into its all-digital initiative, which is expected to be complete by year end. Over the last six weeks, the company began introducing a new product suite, Charter Spectrum, in all-digital markets, including Dallas, Fort Worth, and Greenville, SC. The offering includes access to 200 HD channels and an interactive programming guide. Minimum Internet speeds are 60 Mbps-100 Mbps depending on the market.
Charter's cloud-based user interface has worked as designed over the course of a test in employee homes. The next phase is to expand to customer homes in certain markets by the middle of the year to ensure it scales.
The first quarter also saw Charter independently certifying its WiFi router as providing the "fastest wireless service in the country compared to any competitor," said Tom Rutledge, Charter CEO. The router will be launched during the second quarter.
For its part, Comcast is adding 15,000 to 20,000 X1 boxes per day, which is double the rate of deployment from six months ago. The company is rolling out an Xfinity TV app to allow customers to live stream their video lineup to any device in the home and watch DVR recordings in-house or on the go. It is designed to work on both iOS and Android devices, as well as Kindle.
Comcast CEO Brian Roberts noted that the company has increased Internet speeds for the 13th time in 12 years, and has increased its WiFi footprint to more than 1 million public hotspots. Comcast has deployed 8.3 million WiFi devices.