Cable customers could see better service as a result of the industry's latest planned merger—and maybe mitigate rate hikes.
Charter Communications said Tuesday it will purchase Time Warner Cable for $55 billion in a deal that would merge the second and third biggest U.S. cable companies. Charter said it also plans to acquire sixth-largest cable provider, Bright House Networks, for $10.4 billion. If regulators approve the deals, the resulting company could have as many as 23 million total customers, second only to Comcast's 27.2 million. (Comcast owns NBCUniversal, CNBC's parent company.)
This early, it's tough to say how the deal will ultimately shake out for consumers, said Mukul Krishna, market research firm Frost & Sullivan's digital media senior global director. "Frankly, it really depends," he said. "Many times with mergers, people just keep going on. It's business as usual."
Executives from Charter Communications, Time Warner Cable and Bright House Networks said in a joint statement the merger puts them in a better position to deliver competitive services. "With our larger reach, we will be able to accelerate the deployment of faster Internet speeds, state-of-the-art video experiences and fully featured voice products, at highly competitive prices," said Tom Rutledge, Charter's president and chief executive.
There's little market overlap among the three providers, so consumers won't see hikes from fewer options. "It's not like we're taking competitors out of the market," said Erik Brannon, senior analyst of U.S. television for research firm IHS. Currently, a 300-channel television package averages $106.53 per month nationwide, according to comparison site WhiteFence.com, although consumers often get better promotional pricing through new-customer packages or multiservice bundles.