Wunderlich Securities Comments On Cablevision Systems, LTE Broadband Products

According to a recent Wunderlich Securities note, Bloomberg reported over the weekend that Buy-rated Cablevision CVC and Time Warner Cable TWC are engaged in discussions with LightSquared to offer LTE wireless broadband products to customers. LightSquared is taking a wholesale-only approach using terrestrial and satellite spectrum. This is likely a reaction to the proposed AT&T acquisition of T-Mobile and Clearwire's continued travails, although CVC is not a Clearwire investor. Possible increasing relevance of quad play. Although CVC has done a remarkable job of neutering FiOS competition and advancing its WiFi build, the increased relevance of mobile broadband with device proliferation and the branding halo conferred by iPhone and Android products suggests that the playing field is not improving for most MSOs. A successful implementation by LightSquared with its wholesale strategy could be a win for cable MSOs as they could avoid committing capital and support a market alternative to A&T and Verizon, particularly imperative if the $39bn AT&T move to purchase T-Mobile is approved. Wunderlich has a Buy rating on CVC and $44 PT CVC is trading lower at $34.65