06 Oct Time Warner and Charter Communications Merge
Mergers and acquisitions (M&A) activity are a part of everyday business news. There are many kinds of M&A deals. Some are so small that they have no impact upon the financial markets, while others are so large and complex that there will be a ripple effect felt upon the equity exchanges.
In the telecom and cable industry, there has been no M&A activity through the summer months. However, the fall season could certainly change that.
In the latest news, this week, it was announced that the two telecom giants of Charter Communications and Time Warner Cable will be joining forces. With this new venture, there will be a powerful, brand new arsenal of cable services offered to both the business and residential sectors. One of the vendors that will be feeling the effects of this merger is CenturyLink.
They, too, are a rather large telecom and cable carrier, but they will not be swayed by a much more dominant force in the marketplace. According to Glen Post, the CEO of CenturyLink, “We see this as an opportunity for us because there will be a lot of missteps and confusion with the merger and we’ll take advantage of that . . . we’ll continue to roll out higher speed, more fiber. And where we have done that we have seen very high take rates of this product, so we don’t feel threatened by this merger.” (SOURCE: https://us-mg5.mail.yahoo.com/neo/launch?.rand=10gpnvrq0g2m0#9846627636).
CenturyLink is, potentially, facing a 90 percent competition rate in its own market. Of this, Comcast possesses 40 percent of the market share, while Charter and Time Warner Cable will capture 40 percent and 15 percent, respectively.
In an effort to ward off the competition, CenturyLink announced that it will make more concerted efforts to hit upon the small to medium sized (SMB) market. Their current penetration rate is at 20 percent for this particular market segment.
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