May 8, 2017 / 11:56 AM / 4 months ago

Comcast, Charter announce wireless partnership

(Reuters) - Comcast Corp and Charter Communications Inc on Monday announced a wireless partnership, as the cable providers seek to add more services in a bid to reduce customer churn.

The deal will also help speed up their entry into the highly competitive and over-saturated market for mobile service in the United States.

Comcast is moving into wireless as cable companies seek to offset customer attrition, as younger viewers increasingly shun high-priced subscriptions in favor of cheaper online options.

The move could affect wireless carriers including AT&T Inc and Verizon Communications Inc, which could be hurt by additional subscriber losses, said New Street Research analyst Jonathan Chaplin.

AT&T and Verizon already face stiff competition from smaller rivals T-Mobile US Inc and Sprint Corp.

FILE PHOTO: A Charter Communications company service van is pictured in Pasadena, California U.S., January 26, 2017.Mario Anzuoni

As part of the agreement, Charter and Comcast cannot make "material" transactions in the wireless space for a year without the other's consent, Comcast said in a filing with regulators.

The material transactions may include acquisitions, investments or joint ventures that have a value of more than $200 million.

The agreement could help pave the way for a merger between Charter and Comcast in the future, New Street Research's Chaplin said.

"(The partnership) will also enable us to provide more competition and drive costs down for consumers at a similar national scale as current wireless operators," Charter Chief Executive Tom Rutledge said in a statement.

Charter's shares were down 2 percent at $328.03 in early trading, while shares of Comcast were slightly higher at $39.10.

Reporting by Rishika Sadam in Bengaluru; Editing by Sai Sachin Ravikumar

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