Altice USA has reached an agreement with Sprint Corp that allows the cable operator to sell a wireless service through Sprint’s network.
Included in the deal, is Sprint has the use of the broadband infrastructure of Altice to strengthen its wireless network nationwide, read a prepared statement released by both companies. The statement did not include any financial terms of the deal.
Talks between SoftBank Group, the majority owner of Sprint to merge with wireless rival T-Mobile US fell apart during the weekend after several months of discussions.
The deal between Sprint and Altice is the most recent example of a cable operator in the U.S. entering into the wireless industry to compete with the giants such as AT&T and Verizon Communications.
Comcast Corp, the largest cable operator in the U.S., recently began selling cellular service through Verizon’s network. At the same time, the second largest U.S. cable operator Charter Communications is planning to become a wireless provider in 2018.
Offering wireless service, as well as high-speed internet and television, could be of help to the cable companies in maintaining subscribers, as many are dropping pay-TV for online options that are less expensive.
As connectivity and content continue converging, the belief is this approach is going to become the model for future arrangements across many industries including tech, cable and others, said CEO of Sprint Marcelo Claure in a prepared statement.
He said back in May that Sprint was working on pilot of a mobile virtual network with a partner that he did not name.
Altice has more than 4.9 million subscribers, including a large amount in and around the suburbs of New York City. It took over Cablevision in 2017 to become the No. 4 biggest cable operator in the U.S. It has not yet determined when it is going to enter wireless, according to a spokesperson with the company on Sunday.
The wireless service of Altice could begin during the second half of next year, as ramping the operation up will require not just time but more investment, said an analyst on Wall Street Monday morning.
The agreement makes good sense, as the amount of required capital is limited and Altice USA has wanted to keep its mergers and acquisitions firepower for its cable operations, said another Wall Street analyst.
Altice is not a new player in the wireless industry. Altice NV, which Patrick Drahi leads, offers cellular services in many countries including Israel, France and Portugal, and is the parent of Altice.