Moffett Likes Charter-Cox Deal
Charter's mobile service will have more room to grow with Cox's wireline footprint.
WASHINGTON, July 10, 2025 – MoffettNathanson Senior Managing Director Craig Moffett is a big fan of Charter’s $34.5 billion acquisition of Cox Communications.
The combined cable operator, which will also be called Cox Communications, would be the largest ISP in the country, with 35.9 million residential and business customers and 69.5 million passings.
The deal, Moffett said in an investor note breaking down a recent Securities and Exchange Commission filing from the companies, should generate more than $10 billion in value from cost and capex synergies.
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“The total value creation from the deal, including revenue and strategic synergies, can be expected to be substantially larger, in our view,” he wrote Wednesday.
That owes in large part to Charter’s mobile service, which Moffett called “overwhelmingly Charter’s most important growth engine.”
The service will have a larger pool of potential subscribers as the company’s wireline footprint absorbs Cox’s. Cox does have a mobile service, but it has very few subscribers.
“Mobile is unquestionably the largest opportunity for the combined entity,” Moffett wrote. “It is likely the case that it was Charter’s success in mobile that ultimately persuaded the Cox family to agree to the merger.”
He noted mobile revenue is basically too small to measure from Cox’s roughly 200,000 subscribers, but the service makes up nearly 7 percent of Charter’s revenue, a number the company has been growing by more than 30 percent per year. That should provide a good opportunity for the service to grow in Cox’s footprint once the merger is complete, Moffett wrote.
Charter has about 10.4 million wireless lines. Its mobile service is offered through a deal with Verizon, like Cox’s, but the large majority of traffic is offloaded via Wi-Fi. Cable operators have also been leaning into their mobile services as a means of retaining subscribers with bundled services.
Bundling mobile and home broadband could help address what Moffett said would be the combined company’s biggest priority: lowering Cox’s average revenue per user. Charter’s 460-page filing with the Securities and Exchange Commission last week showed Cox’s residential ARPU to be $88, higher than its cable industry peers.
That sounds like a good thing, but cable companies have been hemorrhaging broadband subscribers, a trend Charter CEO Chris Winfrey and others have attributed partly to customers’ frustration with price hikes. Competition from fiber and cheaper fixed wireless services, plus the shuttering of the Affordable Connectivity Program last year, have made the situation worse.
Losses have slowed somewhat this year but are not expected to fully reverse in the near future, even as Charter and Comcast have taken steps to address the issue in the form of price locks and fewer yearly increases.
“Bundling broadband with mobile and video will go a long way towards addressing Cox’s broadband ARPU problem. But it won’t be enough,” Moffett wrote. He wrote the combined company would likely freeze prices in Cox’s footprint for a few years.
MoffettNathanson sees Charter’s stock jumping up in the future, as free cash flow should increase once the company finishes its rural buildouts. The company’s stock was at $403 on Thursday.
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