In order to promote each others products and reduce competition,
Time Warner Cable Inc.
) expanded their relationship with Verizon Wireless to provide
triple play services (voice, video and Internet) and LTE-based
smartphones and tablets to customers across Arkansas, Georgia,
Indiana, Kentucky, Louisiana, Michigan, Mississippi, South Carolina
and Tennessee. Moreover, new customers from Time Warner Cable and
Comcast will also be provided with a $200 and $300 Visa prepaid
debit card, respectively.
The partnership has evolved on the back of an agreement between
the cable companies last year to sell Advanced Wireless Spectrum
(AWS) worth $2.3 billion and $1.1billion, respectively, to Verizon
Wireless. Additionally, it will give them the flexibility to sell
bundled services to their customers from their respective stores.
However, the sale of AWS spectrum has not been approved by Federal
Communications Commission (FCC).
In order to gain market traction in the cable and satellite
market, large telecom carriers have started offering video services
to their subscribers through fiber optic cable networks. As a
result, large cable TV service providers are seeing an exodus of
subscribers, which is eating into their market shares.
So we believe that collaborative agreements between cable and
telecom companies, such as this one may help to alleviate this
competition. Customers should also gain from the increased
flexibility of being able to choose different service plans.
Currently, both Comcast Corp. and Time Warner Cable have a Zacks
#3 Rank, implying a short-term Hold rating on the stocks.
COMCAST CORP A (CMCSA): Free Stock Analysis
TIME WARNER CAB (TWC): Free Stock Analysis
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