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AT&T, DirecTV announce $48 billion merger
By Cecilia Kang, Sunday, May 18, 5:16 PM E-mail the writer
AT&T and DirecTV on Sunday announced an approximately $48 billion merger that would create a new telecom and television behemoth to rival cable firms — while raising fresh concerns over competition and options for consumers.
AT&T would gain DirecTV’s 20 million U.S. subscribers, a company with strong cash flows and an ability to fatten its bundle of offerings. The combined firm would be able to offer phone, high-speed Internet and paid television subscriptions to more customers — packages only cable firms such as Comcast have been able to sell.
It is the latest mega-merger to be announced this year in a dramatically shifting telecommunications industry. The titans of the industry have recently rushed to bulk up — in overall size and in diversity of service offerings — as their legacy phone and television businesses fray and consumers turn to the Internet for communications and entertainment.
The deals, which must be approved by federal regulators, have prompted new concern that consumers could be left with fewer options and even higher prices after years of creeping increases in monthly bills. Last year, U.S. cable television prices increased 5.1 percent to an average $64, triple the rate of inflation, according to a government report.
“The industry needs more competition, not more mergers,” said John Bergmayer, a senior staff attorney at Public Knowledge, a nonprofit consumer advocacy group. “We’ll have to analyze this one carefully for potential harms both to the video programming and the wireless markets.”
After a failed attempt three years ago at buying wireless provider T-Mobile, AT&T had been searching for alternative acquisitions. But its choices were limited, with regulators expressing great concern that the wireless and high-speed-Internet markets were not competitive enough.
The Dallas-based company said it would gain broad strategic benefits from buying the nation’s second-largest paid-television provider. The phone giant would have greater power with television programmers to bring down licensing costs. And as the nation’s second-largest wireless carrier, it could use its new prominence in the television industry to bring videos to its mobile customers. El Segundo, Calif.-based DirecTV has an exclusive contracts with programmers, including NFL Sunday Ticket, which allows football fans to watch their favorite teams even if they live outside the local television markets serving the teams.
Unlike the rejected bid to buy T-mobile, I expect this one would get approved by the Feds. There would not be an elimination of a competitor in either the TV industry or the cell phone industry, and the merger might improve both. [Reply]
Originally Posted by alnorth:
Unlike the rejected bid to buy T-mobile, I expect this one would get approved by the Feds. There would not be an elimination of a competitor in either the TV industry or the cell phone industry, and the merger might improve both.
Actually it would eliminate TV competition where AT&T is providing their U-Verse product
Originally Posted by dirk digler:
Actually it would eliminate TV competition where AT&T is providing their U-Verse product
Hopefully this gets rejected.
Actually, the speculation is that AT&T is out of resources on it's residential broadband network and looking to offload wireline customers to DirecTV in order to save bandwidth.
They tried to hedge their bets by using vDSL over copper and it failed. [Reply]
Originally Posted by htismaqe:
Actually, the speculation is that AT&T is out of resources on it's residential broadband network and looking to offload wireline customers to DirecTV in order to save bandwidth.
They tried to hedge their bets by using vDSL over copper and it failed.
They never did full fiber to the home. Except in brand new neighborhoods. Posted via Mobile Device [Reply]
Originally Posted by Deberg_1990:
They never did full fiber to the home. Except in brand new neighborhoods. Posted via Mobile Device
Yep.
One of the things Verizon and others have gotten right. Nobody wants to just abandon millions of dollars of copper cable but sometimes you have to make hard decisions if you want to be part of the future. Google doesn't have an existing copper plant so they've got no barriers to going balls deep on pulling fiber to everywhere.
AT&T has fucked up on so many levels in the residential broadband arena. They could have used their $50B to strengthen their in-house media offerings or outright bought a media company. [Reply]
Originally Posted by htismaqe:
Actually, the speculation is that AT&T is out of resources on it's residential broadband network and looking to offload wireline customers to DirecTV in order to save bandwidth.
They tried to hedge their bets by using vDSL over copper and it failed.
DirecTV owns a shitload of spectrum. One of the funds in our portfolios has made a fuck load on his DirecTV position, and he explained it as not a play on the satellite business but as a play on spectrum. DirecTV was apparently very forward looking and has been buying up spectrum quietly for the last 8 or so years and owns a lot of unused spectrum. [Reply]
Originally Posted by htismaqe:
Actually, the speculation is that AT&T is out of resources on it's residential broadband network and looking to offload wireline customers to DirecTV in order to save bandwidth.
They tried to hedge their bets by using vDSL over copper and it failed.
what happened to that $500 odd million they took from the government a while back that was supposed to enhance and upgrade their whole infrastructure? I call bullshit on them maxing out their resources. [Reply]
Originally Posted by htismaqe:
Actually, the speculation is that AT&T is out of resources on it's residential broadband network and looking to offload wireline customers to DirecTV in order to save bandwidth.
They tried to hedge their bets by using vDSL over copper and it failed.
Originally Posted by milkman:
I have no idea what any of this means.
Having some insight into the telecomm field, I think what Htis said was that ATT bought DirecTV to shift some customers who are using their data lines for both Internet and TV in order to shift part of the load (the television part) onto DTV's existing service.
And I'm guessing vDSL means virtual Digital Subscriber Line over copper networking, which means it's already at a disadvantage compared to fiber optic cables. [Reply]
Originally Posted by dirk digler:
Actually it would eliminate TV competition where AT&T is providing their U-Verse product
Hopefully this gets rejected.
pfft, U-verse doesn't count.
The Feds are not opposed to a merger eliminating a teeny-tiny irrelevant "competitor" if there would still be a healthy market and the merger makes sense otherwise. [Reply]
Originally Posted by Discuss Thrower:
I've never had a problem with AT&T..
You just have to accept that fact that their in-store cellular service is slow as fuck.
Ditto. I am a new customer for AT&T for U-Verse and wireless, and haven't had any problems with them yet. They been pretty good as far as customer service for me. [Reply]
Originally Posted by Discuss Thrower:
I've never had a problem with AT&T..
You just have to accept that fact that their in-store cellular service is slow as ****.
I have. Horrible customer service. I switched my plan online a few months ago. After a full day it wasn't switched, so I called. There was no record of the switch. The guy assured me he took care of it. Another day, still no switch, I call back and the person said there was no record of either previous transaction. She assured me should would take care of it. The next day, SAME THING. No record of my previous calls, no switch. I asked to speak to a supervisor, and told them I was going to switch to T-Mobile (who had just made the offer to pay the fees for people that switched). She finally took care of it.
The fact that I had three transactions - one online and two on the phone - and there was no record of any of them is extremely disturbing. [Reply]