Verizon Chief Executive Lowell McAdam may be getting ready to answer rival AT&T’s moves to buy DirecTV and Time Warner.
The New York wireless giant is weighing the acquisition of a cable company to help grow demand for its wireless data products, two well-placed sources told The Post.
The CEO told friends at the Consumer Electronics Show in Las Vegas earlier this month that he wants to buy into cable, one source said.
“They need it for 5G,” said a second source, confirming McAdam’s interest.
The most likely targets would be “Charter or Comcast,” the source noted.
“Altice is too small,” the source speculated.
To be sure, Verizon is not in talks with any cable company and may not ever make such a move.
Still, McAdam has been under pressure recently with Verizon’s deal to acquire Yahoo still a question mark months after two major hacks of the internet portal were revealed.
The wireless giants operate on 4G wireless networks but are preparing to become a real alternative to the cable company with phone, TV and data services.
To do that more effectively, the phone companies are pouring money into 5G connections that can work with cable systems to provide more stable coverage for consumers.
McAdam has already given Wall Street analysts and investors big hints that he’s looking at a combination with, say, a Charter Communications.
In a mid-December meeting with Wall Street analysts, McAdam said a get-together between the two “makes industrial sense.”
Three weeks later, at CES, his comments to friends make it clear that cable distribution is a path he is exploring, perhaps more seriously than first thought.
Verizon is still yet to say whether it is moving ahead with its planned acquisition of Yahoo.
Were Verizon to make a move on Liberty Media-backed Charter, it would replicate the kind of deal shareholder John Malone made back in 1998 to sell global cable company TCI Communications to AT&T.
Rival AT&T not only owns DirecTV but also has an agreement to acquire Time Warner for $109 billion in cash and stock.
McAdam is obsessed with distribution, said a person familiar with his thinking.
Verizon in April sold some of its FiOS network to Frontier Communications, clearing the path, some believe, to allow a cable merger.
“For regulatory reasons, Verizon can’t dominate in FiOS and cable, so it appears to have to set its sights on cable,” an industry source said.
Charter could be a seller under the right conditions, the source added, emphasizing that Malone and Charter CEO Tom Rutledge are just getting going on their vision for Charter.
But it does mean Verizon has to promise enough autonomy for the Charter team to advance its own plans — only if “Malone and Rutledge are not ready to cash out,” the source said.
Verizon declined to comment.