Charter to Acquire Cox Communications

Charter to Acquire Cox Communications

Tony:  Hello, today is Tuesday June 3^rd, 2025.  I’m Tony Mangino from TC2 and this is Staying Connected.

I’m joined again today by Keith Cook, my long-time colleague here at TC2 and we’re going to discuss the recently announced merger of Charter Communications and Cox Communications.

Keith:   Hi Tony, it’s great to be back on Staying Connected

Tony:  First, let’s talk about the companies involved and what’s on the table. To set the stage, Charter Communications is the second-largest cable operator in the U.S., known for its Spectrum brand. Cox Communications, while privately held, is the third-largest cable provider, serving over 6 million homes and businesses.

Keith: Yes, this is big. This merger isn’t just another consolidation—it’s the most significant attempt since Comcast tried and failed to merge with Time Warner Cable back in 2015.  According to the news release, Charter will acquire Cox for roughly $22 billion.  The deal will combine Charter’s 31.4 million customers with Cox’s 6.3 million.  Interestingly, the much smaller Cox Communications name will survive.  The new company is expected to now have slightly more customers than Comcast, so that will mean two giants that are massively larger than all other competitors.  But keep in mind that the vast majority of these customers are consumers, not businesses.  Further, both companies have seen their consumer customer base eroded by all the streaming options now available—many of whom have, proverbially, “cut the cable”.  That’s actually the primary reason for this transaction, an attempt to reduce costs via consolidation allowing for better competition with streaming companies. 

Tony:  Yes, so what might this mean for businesses customers – enterprises such as our clients?

Keith:   Great question, and I think there are several areas in which this could potentially enhance the communications services used by large enterprises.  First, more size, scale and reach, should enable better competition with AT&T, Verizon and Lumen, for wireline Internet-based WAN services and potentially grow revenue.  Further, operational efficiencies of the combined entity are projected to deliver about $500 million in cost savings over the next three years.  That’s what these things are always about, right?  Our Podcast series last year highlighted the growth of Broadband in the enterprise WAN, and that growth continues to accelerate.  The traditional Cable Companies are also continuing to invest in network infrastructure upgrades to expand their offerings of more robust dedicated Internet service.  We’re talking about fiber based internet services that come with more robust SLAs than broadband internet.  So those wired Internet offerings are one thing.

A second is wireless.  Both these companies have struggled to keep up in the hyper competitive market for mobile services.  And, again, I know the mobile market is also largely consumer focused, and over time I suspect that the cableco consolidation will support a wireline/mobility bundling opportunity for the consumer market.  There also seems to be an opportunity to make inroads into the enterprise wireless space and inject much needed competition in that market. 

Tony:  Keith, I think the point about investment in upgrading network infrastructure on the broadband side is a particularly good one.  The combined entity will also provide almost immediate expanded footprint and network capillarity in major metropolitan areas.  Are there any immediate concerns in this merger for our enterprise customers?

Keith:  I honestly don’t think there will be much, if any, negative impact there.  We’ve all been through many telco-related mergers before, so account teams may change as well as operational procedures, but I don’t think it will cause any material disruption in service.  And again, I’m hopeful that over time it may expand and enhance enterprise level network services.  From a contractual standpoint, there may be an opportunity to push for better terms, or at least cherry pick across the best of two contacts if you’re already doing business with Cox and Charter.

Tony:  Keith, Sometimes the announcement of intentions doesn’t always come to fruition.  Any thoughts on that?

Keith:  Of course, a deal this size draws major regulatory scrutiny. The FCC and the Department of Justice are likely to weigh in heavily.  Possibly state commissions as well.  And of course, the Charter Communication shareholders have to vote in favor of this too.  Will shareholders approve- probably, but there have been surprises before.  Will regulators approve it? That’s the 22 billion-dollar question!  Advocates worry about reduced competition and higher prices. Supporters argue that scale will bring faster networks and more innovation.  This will take some time of course, but let’s not forget, the last time Charter did a major acquisition—in 2016, when it bought Time Warner Cable—the acquisition came with strict conditions. This merger, if it clears regulatory hurdles, will be no different.

Tony:  Great discussion today, Keith, thank you.  If you have questions or would like to delve deeper into this matter, please contact me, Keith, or any of our TC2 and LB3 colleagues by giving us a call or shooting us an email. 

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