Comcast, TWC to sell spectrum licenses to Verizon
The nation’s two largest cable companies, Comcast and Time Warner Cable, will reap a windfall selling spectrum to Verizon, announcing Friday plans to unload $3.6 billion worth of licenses, as well as an ongoing collaboration where the erstwhile rival cable and telco groups will sell each others’ services.Comcast, TWC and smaller player Bright House Networks, the three partners in a venture called Spectrum Co., will take in, respectively, $2.3 billion, $1.1 billion and $189 million from the sale of 122 advanced wireless services spectrum licenses to Verizon. The companies said the cablers on one hand and Verizon Wireless on the other will also become agents to sell one another’s products and, over time, the cablers will have the option of selling Verizon Wireless service on a wholesale basis. Cable companies and Verizon Wireless have formed a venture to develop technology that will better integrate wireline and wireless products and services. The deal was inked at a time when consumer demand for wireless services and bandwidth is increasing rapidly, and ahead of likely government action to free up even more spectrum. Comcast Cable prexy Neil Smit said the agreements, together with the Philadelphia giant’s Wi-Fi plans, “enable us to execute a comprehensive, long-term wireless strategy and expand our focus on providing mobility to our Xfinity services.” “Spectrum is the raw material on which wireless networks are built,” said Dan Mead, CEO of Verizon Wireless. “Americans deserve excellence from a wireless service provider, and innovative wireless companies plan ahead in order to deliver on that expectation.” Time Warner Cable prexy Rob Marcus said he’s pleased at the price the partners got for the spectrum and “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.” His investors were also pleased with the unexpected cash inflow. Time Warner Cable shares were higher in early trading, up 2.36% at $62.36. Comcast shares got a boost too, rising 2.66% to $23.17. Both were running ahead of the overall market. Verizon shares lagged, up only 0.24% to $37.86. The sale is subject to FCC approval.