Comcast, Time Warner Cable, Bright House Sell Wireless Spectrum to Verizon for $3.6 Billion
NEW YORK - Cable giants Comcast Corp. and Time Warner Cable along with smaller cable firm Bright House Networks have agreed to sell wireless spectrum to telecom company Verizon Wireless for $3.6 billion.
The companies also struck agreements that will see the cable firms and the telecom giant sell each other's products.
SpectrumCo, a joint venture of the cable companies, said Friday that Comcast will receive approximately $2.3 billion from the sale. Time Warner Cable about $1.1 billion and Bright House $189 million.
Analysts said the deal was evidence that the cable operators have decided against spending a lot of money to build out their own wireless network and services.
"The agreement comes at a time when consumer demand for wireless services and bandwidth is increasing rapidly," the firms said. "This sale of spectrum is an important step toward ensuring that the needs and desires of consumers for additional mobile services will not be thwarted by the current spectrum shortage."
Government action to free up more spectrum is expected, but the deal partners said their transaction that available spectrum is used effectively for the benefit of customers.
The deal partners said Friday that they have also formed an "innovation technology joint venture" for the development of technology to better integrate wireline and wireless products and services.
“We’re excited to be able to offer the nation’s best wireless services to our customers and to have Verizon Wireless as a sales channel for our superb wireline services," said TW Cable president and COO Rob Marcus. "We’re also pleased to have obtained an attractive price for the spectrum we’re selling.”
“These agreements, together with our Wi-Fi plans, enable us to execute a comprehensive, long-term wireless strategy and expand our focus on providing mobility to our Xfinity services," said Neil Smit, president of Comcast Cable.
Dan Mead, president and CEO of Verizon Wireless, added: “Spectrum is the raw material on which wireless networks are built, and buying the…spectrum now solidifies our network leadership into the future, and will enable us to bring even better 4G LTE products and services to our customers."