Time Warner Cable has been brought by Charter Communications for $55.33 billion, after Charter’s bid of $55 billion. With the rise in online video distributors, business of cable companies have been hit, and they are working hard to regain lost ground.
Time Warner and Charter said that there would be the deployment of Wifi networks in public places as the merger will drive investment in broadband networks. It would also expand optical network for business, and Charter aims to bring jobs to the United States, for the benefit of customers and employees. According to a Time Warner press release, the improvements will result in faster broadband speeds, more HD channels, better video products and more.
“In the last few years Charter has improved their methods in customer services,” said Tom Moore, executive director of Wiscosin Cable Communications Association.
The two companies are the largest players in the traditional cable market, and is expected to serve about 24 million people in 41 states. Moore stated that they would represent 90 percent of video subscribers. Time Warner has a large presence in eastern Wisconsin, including Appleton, Green Bay, Oshkosh and Milwaukee areas, and Charter has its presence in central Wisconsin with parts of eastern Wisconsin and Madison area.
Professor of economics Abdur Chowdury at Marquette University in Milawaukee said that consumers can expect lower bills and better internet speeds, after the merger. Chowdury added that if the proposal is passed by the government, consumers are likely to see pricing and service change by 2016 end.
However, both the companies face low customer satisfaction: Time Warner is ranked last in the satisfaction index with 54 percent, and Charter is third from the bottom with a score of 60 percent during a 2014 survey. The report mentions that poor reliability, prices and decline in customer service was to blame for customer satisfaction.
Though the merger aims to bring back online video subscribers to traditional cable, it will be successful only if they lower their costs substantially.