If everything goes as planned, the two largest US cable TV providers will soon become one. Comcast wants to buy Time Warner Cable for $45.2 billion but will the market let them?
Presented as a merger
The deal is officially being presented as a merger, but Comcast, the largest cable TV provider with 21.7m TV subscribers, wants to buy 100 % of Time Warner Cable, the second largest with 11.2m TV subscribers. They hope to finalize the sale by the end of 2014, but the deal will surely be scrutinized by the authorities.
Although Comcast and Time Warner Cable compete in very few regional markets, the deal could kill competition in many states. Some fear that the new company would enjoy almost monopoly status in a TV market with very high entry barriers. Despite the concerns, Comcast believes that the deal will go through, saying that it will lead to "a superior video experience, higher broadband speeds, and the fastest in-home Wi-Fi".
- "It is pro-consumer, pro-competitive, and strongly in the public interest," says Comcast CEO Brian Roberts.
He believes that the new company will face tough competition from Netflix, Hulu and Google Fiber.
If the deal is approved by the authorities it will be a milestone in the TV business, but lots of questions remains before that can happen. The TV industry fundamentally needs more competition; not less. Is that even possible with an even larger cable TV company?