Charter Communications announced on Tuesday it is acquiring rival Time Warner Cable to create a powerful new player in the US pay TV and broadband sector.

The deal worth USD 55.3 billion plus debt comes weeks after Comcast abandoned a bid for TWC in the face of opposition from US antitrust regulators. Including debt, the transaction is valued at USD 78.7 billion.

The merger, which also needs regulatory approval, would create a major new rival for Comcast, whose plan for TWC drew fierce opposition from consumer groups and fueled fears of creating a dominant player in the broadband Internet market.

Charter also brings into the mix Bright House Networks, for which it announced a buyout earlier this year.

The combination of Charter, Time Warner Cable and Bright House will have 23.9 million customers in 41 states.

In a statement, Charter said the deal would lead to improvements in both Internet and video services.

"The teams at Charter, Time Warner Cable and Bright House Networks are filled with the innovators of our industry

That spirit of innovation will live on, and it will create real benefits and great long-term value for the customers, shareholders and employees of all three companies," said Tom Rutledge, president and chief executive of Charter who will also head the combined group.

"With our larger reach, we will be able to accelerate the deployment of faster Internet speeds, state-of-the-art video experiences, and fully-featured voice products, at highly competitive prices. In addition, we will drive greater competition through further deployment of new competitive facilities-based Wi-Fi networks in public places, and the expansion of the facilities footprint of optical networks to serve the large, small and medium sized business services marketplace."

TWC was also courted by France’s Altice in exploratory talks. But the group headed by Franco-Israeli telecoms and media magnate Patrick Drahi will not make a counter-bid, a source close to the company told AFP.

The number two US cable firm, TWC was spun off in 2009 from media giant Time Warner.

The consolidation comes with the cable TV industry seeking to adapt to a shift of viewing habits to online media such as Netflix and Hulu, which allow people to watch on demand.

Although the number of cable "cord cutters" has been relatively modest in recent years, analysts expect this trend to accelerate, which could have a significant impact on the television industry.

Analysts said the deal is likely to get approval but could face scrutiny from regulators.