Comcast, TWC Merger Collapse Seen as Setback for Wireless Competition

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The termination of the planned merger between Comcast Corp. and Time Warner Cable (TWC) may have dealt a blow to the cable industry’s plans to become a stronger Wi-Fi competitor and launch additional wireless services, an analyst said.

Comcast last week walked away from the $45.2 billion acquisition of TWC in the face of strong opposition from the U.S. Justice Department and Federal Communications Commission.

“Combining Comcast and Time Warner’s Wi-Fi assets into a single entity would have created a much more powerful Wi-Fi competitor, and a platform on which to launch further mobile experiments,” said Rich Karpinski, 451 Research principal analyst, commenting on a Bloomberg story that reported on the merger’s collapse.

“With the deal falling apart, the pair will likely continue to flirt with wireless, including growing their public Wi-Fi footprints and enabling Wi-Fi-only calling on customer mobile devices. But the likelihood of the cable industry mounting a major mobile offensive was dealt a significant setback,” Karpinski added.

An economic consultant told the FCC last year that Comcast’s acquisition of TWC could pave the way for Comcast to deliver mobile wireless services.

Mark Israel of the economic consulting firm Compass Lexecon said Comcast and TWC customers would benefit from an expanded Wi-Fi offering, which could become “part of a strategy to use the combined firm’s grid of Wi-Fi hotspots as a launching point for a national ‘Wi-Fi first’ mobile wireless service.”

He also raised the prospect that Comcast would offer mobile wireless service using Wi-Fi and wholesale network access from other providers.

Although Comcast has relationships that would enable it to deliver its own branded mobile-phone service, the broadband giant has been focused on Wi-Fi expansion for its Xfinity customers in outdoor locations such as beaches and sporting venues, neighborhoods and to businesses such as cafes and restaurants. Philadelphia-based Comcast said a year ago that its Xfinity Wi-Fi network would reach eight million hotspots by the end of 2014, covering 19 of the nation’s 30 largest cities.

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