Verizon In Talks With Charter On Blockbuster Merger That Could Reshape Telecom And Media Landscape

Nearly a year ago, federal regulators approved Charter’s bid to purchase rival telecom company Time Warner Cable. The $55 billion dollar deal rocketed Charter from the fourth-place position in the U.S. cable market to second place behind Comcast. Now, it looks like an even bigger fish is swimming around looking to gobble up the newly engorged Charter: Verizon.

According to sources close to the matter, Verizon CEO Lowell McAdam has reached out to Charter executives to discuss a possible acquisition. The Wall Street Journal cautions that these are just preliminary talks and that there is no guarantee that a deal will be struck between the two companies.

In the event that a deal does in fact go through, it will turn Verizon, America’s largest wireless carrier, into a true telecom juggernaut. Verizon has 114 million wireless subscribers, and around 5 million customers on its FiOS bundled broadband, telephone and TV service. Charter has 17 million TV customers and provides 21 million broadband connections to Americans.

lowell mcadam
Verizon CEO Lowell McAdam

Verizon is likely considering this move as it looks to diversify its sources of income thanks to perennial ankle biters like T-Mobile in its bread-and-butter wireless business. Earlier this week, T-Mobile CEO John Legere continued his usual tirades against Verizon, labeling the company as a dinosaur that hasn’t adapted to the realities of today’s market.

“Look, Verizon’s always been the carrier’s carrier, and they’ve always held tight to the industry’s most-hated conventions and they’ve been the last to change,” said Legere. “Why should it be any different as this industry evolves past data limits and fee-laden bills?

“What’s next, Verizon?  How else can you bring back the good ole days?  Night and weekend minutes?  Toupees and sports cars?”

The immediate “next” for Verizon is to close out its deal to purchase Yahoo. Verizon announced its intentions to purchase Yahoo for nearly $5 billion last year. However, that transaction has been marred by Yahoo’s ineptitude when it comes to securing customer data thanks to high-profile account breaches. Verizon is still likely to go through with the purchase, but it is looking to get a discount on the original $4.83 billion purchase price.

If both deals come to fruition, it will give Verizon broad control over fixed internet, wireless internet, TV, telephone and internet content (not to mention Yahoo’s millions of customers and valuable customer data).