Tuesday , 21 August 2018
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Charter Communications Plans to Execute 5G Network Trials – Yahoo Finance

Charter Communications Plans to Execute 5G Network Trials – Yahoo Finance

Charter Communications Inc.  CHTR, the second largest cable MSO (multi service operator) in the U.S., recently announced that the company is launching experimental field trials of the upcoming 5G wireless network. Notably, these trials come on the back of spectrum test licenses granted to the company by the Federal Communications Commission, the U.S. telecom regulator.

The news immediately gave rise to the speculation that the U.S. telecom behemoth Verizon Communications Inc. VZ is exploring strategic options to acquire the cable MSO. Notably, Charter Communications has an agreement with Verizon to operate as a mobile virtual network operator using the latter’s wireless network.

A combination of Verizon and Charter Communications will bring together Verizon’s 114.243 million wireless subscribers, 4.694 million FiOS video subscribers and 5.653 million FiOS Internet subscribers with Charter Communications’ more than 17 million video customers and 22.5 million high-speed Internet customers. Last year, Charter Communications became a giant cable MSO after its acquisition of Time Warner Cable and BrightHouse LLC.

Verizon is facing intensifying competitive pressure in the U.S. wireless market due to cut-throat pricing pressure from smaller players like T-Mobile US Inc. TMUS and Sprint Corp. S. In the fourth quarter of 2016, total revenue of the company decreased 5.6% year over year to $32,340 million. Verizon added 0.591 million postpaid customers (down 61.1% year over year) while prepaid customer count decreased by 0.009 million.

We believe a merger with Charter Communications makes sense for Verizon since the company is aiming to launch initial version of the upcoming super-fast 5G network in 2017. 5G services require connections to have fiber-optic networks in dense urban areas. Charter Communications would aid Verizon standardize 5G network from a technical perspective. The combined entity will also acquire a powerful position to plot a course in the future of pay-TV industry as they change during that technical evolution.

Price Performance of Charter Communications

2016 was extremely good for Charter Communications’ investors. In the last one year, the stock returned 69.83%, outshining the Zacks categorized Cable TV industry’s gain of 37.91%. Nevertheless, cable TV industry is facing massive cord-cutting threat and Charter Communications is no exception to the trend. We believe that is the primary reason behind the stock currently carrying a Zacks Rank #3 (Hold). You can see  the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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Sprint Corporation (S): Free Stock Analysis Report
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Verizon Communications Inc. (VZ): Free Stock Analysis Report
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Charter Communications, Inc. (CHTR): Free Stock Analysis Report
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T-Mobile US, Inc. (TMUS): Free Stock Analysis Report
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Sprint Corporation (S): Free Stock Analysis Report
 
Verizon Communications Inc. (VZ): Free Stock Analysis Report
 
Charter Communications, Inc. (CHTR): Free Stock Analysis Report
 
T-Mobile US, Inc. (TMUS): Free Stock Analysis Report
 
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