The second quarter earnings result posted by Dish Network Corp and Charter Communications Inc. showed a decline in the number of customers. This fueled speculation that they would merge to improve their results, according to a Bloomberg report.
Dish is currently the third biggest US pay-TV corporation by customers while Charter is the number eight. Bloomberg Industries analyst Paul Sweeney said the two companies would consider merging with their rivals to obtain leverage in talks with television networks.
"The logic seems to be that challenging subscriber trends only highlight the need for consolidation to drive down costs in a mature industry," Sweeney stated. "Investors clearly expect the remainder of 2013 to be active."
Around 78,000 customers dumped Dish during the second quarter. The figure was higher than the 37,000 average drop projected by 11 analysts that participated Bloomberg's survey. On the other hand, Charter lost approximately 48,000 residential-video clients. The number signified a larger decline compared with the 36,000 average estimates of 6 analysts that was surveyed by Bloomberg.
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