Light Reading

AT&T Closing on DirecTV?

Alan Breznick
5/13/2014
50%
50%

Determined not to be dwarfed by the prospective union of Comcast and Time Warner Cable, AT&T appears close to buying satellite TV king DirecTV for about $50 billion, according to a Bloomberg report.

Bloomberg cites people familiar with the matter who say that AT&T Inc. (NYSE: T) is now in advanced talks with DirecTV Group Inc. (NYSE: DTV) about the deal. Under the plan being discussed, Bloomberg says, DirecTV management would continue to run the satellite service as a unit of AT&T. In addition, current DirecTV CEO Mike White would retire after 2015.

If the deal is actually sealed, it would create a huge phone/satellite/broadband monolith in the Americas, particularly in the US. In the pay-TV market alone, the new company would have more than 43 million video subscribers, including about 26 million in the US and the rest in Central and South America.

AT&T would also be scooping DirecTV out of the clutches of number two satellite TV player Dish Network LLC (Nasdaq: DISH), which has long craved to merge with DirecTV. Dish Chairman and Co-Founder Charlie Ergen has had his eye on DirecTV for years. (See Dish CEO: DirecTV Merger Possible.)

Of course, any deal struck by the two companies would be subject to big-time regulatory scrutiny by both the Antitrust Division of the U.S. Department of Justice and Federal Communications Commission (FCC) , which are already gearing up to consider the proposed acquisition of Time Warner Cable Inc. (NYSE: TWC) by Comcast Corp. (Nasdaq: CMCSA, CMCSK).

DirecTV's stock was buoyed by the M&A chatter, surging $5.29 (or about 6%) to $92.45 in after-hours trading on Monday evening. AT&T's share price dipped 6 cents to $36.51.

— Alan Breznick, Cable/Video Practice Leader, Light Reading

(5)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View        ADD A COMMENT
sam masud
50%
50%
sam masud,
User Rank: Light Sabre
5/14/2014 | 2:48:23 PM
Stop it
Russian is not particularly popular right now, but some government agency needs to say a loud "Nyet." I cannot imagine on what grounds such a deal could be justified, other than it would give AT&T even greater market cloud. Of course, the same goes for Comcast-TWC.
mhhf1ve
50%
50%
mhhf1ve,
User Rank: Light Sabre
5/13/2014 | 2:23:25 PM
How is free over the air TV doing?
Pay TV seems to be consolidating and growing... And it makes me wonder what the digital transition did to OTA TV? I know my rabbit ears stopped working they way they used to... And my OTA options seem a lot worse, but is OTA TV dying or...?
Mitch Wagner
50%
50%
Mitch Wagner,
User Rank: Lightning
5/13/2014 | 2:16:06 PM
Consolidation
Lots of consolidation in cable. Doesn't look good for competition. 
VernonDozier
100%
0%
VernonDozier,
User Rank: Lightning
5/13/2014 | 1:16:48 PM
Re: Deal benefits?

For some reason, customers are willing to pay an AT&T premium for the same service; and it's a mystery of the ages.  No one really knows why.

But since Dallas-bassed Baby Bell, SBC, took over, AT&T is an interesting company.  AT&T changes the logo, lays off the good employees, that provide value to the services, Then AT&T promotes its own union rank-and-file into the company it acquired.

There was a chart that said AT&T UVerse actually costs less than AT&T DSL.  So my guess is that AT&T's marketing team hasn't done a good enough job letting people know about the 250GB cap it has every month.  This is about 5 UHDTV shows per month.

AT&T is just too big, so to create opportunities for promotions, for its workforce, and also grow its union membership, it has to acquire non-union companies, push the company's employees out, raise rates for an ad blitz.  Then, it'll be ready to acquire another company in 3 or 4 years. 

In most industries, technology increases efficiency and lowers rates.  However, AT&T isn't a telecom company.  AT&T Laboratories, based in Silicon Valley, is actually in the R&D business of inventing fees that outpace the technology and inflation.   Fact:  Your AT&T bill will never decrease, and you'll never get the same quantity and quality of service.

Why does this matter?  Well, if you were thinking of getting DirecTV, you may want to get it soon before AT&T jacks up the rate. As for DirecTV's 10-years of highest customer satisfaction... Well, judging from the past, those awards will go to another company next year.

After all, this is AT&T.

For over 100 years, AT&T's been in the business of lowering quality standards for all customers, making ads, and sponsoring sports teams, golf tournaments.

If I had $1.00 each time AT&T or a subsidary company that AT&T owns hired an ad agency to change its image, logo, or marketing tagline, I could personally purchase DirecTV.

$50,000,000,000.00?  Not a problem for AT&T.  They probably found this loose change between the Couch Cushions of the AT&T marketing department in Dallas.  It's the couch next to the three-story GOLD STATUE.  (Fact:  "Golden Boy" actually exists; look it up). 

That statue really helps AT&T's service quality.
KBode
50%
50%
KBode,
User Rank: Light Sabre
5/13/2014 | 11:34:31 AM
Deal benefits?
I'm really trying to understand the  benefits of the deal. AT&T's spent a ton on IP video delivery in U-Verse markets, so tacking on satellite TV to U-Verse seems counter-intuitive. They're backing away from DSL in tens of millions of rural DSL markets where bundling satellite with slower DSL makes the most sense. That leaves shelling out this kind of cash primarily to eliminate a pay TV competitor. What other benefits does this deal actually provide AT&T outside of competition elimination and keeping the stock jocks happy?
Flash Poll
From The Founder
Network architects aiming to upgrade their networks to support agile, open, virtualized services in the 21st century need to consider new criteria when choosing between technology suppliers.
Live Streaming Video
BTE 2015 Sponsor Keynote: HP
Dr. Prodip Sen, CTO, Network Functions Virtualization, HP
LRTV Custom TV
Red Hat Demo

7|2|15   |   10:53   |   (0) comments


Red Hat's Nicolas Lemieux demonstrates how Red Hat is driving innovation through open source communities.
LRTV Custom TV
Red Hat's Approach to OpenStack Adoption

7|2|15   |   5:17   |   (0) comments


Red Hat's Radhesh Balakrishnan outlines his company's open source strategy for both enterprises and telcos.
LRTV Custom TV
The New IP Goes Mobile With vEPC

7|2|15   |   1:12   |   (0) comments


Heavy Reading's Gabriel Brown discusses results of a Light Reading survey sponsored by Brocade that shows a clear commitment by mobile operators to move quickly to virtual EPC deployment.
LRTV Custom TV
Making Business Sense of SDN

7|2|15   |   1:42   |   (0) comments


Results of a Brocade-sponsored survey show that CSPs have a clear sense of SDN use cases but are wrestling with the business case. Sterling Perrin of Heavy Reading looks behind the numbers.
LRTV Custom TV
NFV Will Be Here Sooner Than You Think

7|2|15   |   2:22   |   (0) comments


Forget the usual ten-year cycle for new technologies – NFV will be a core part of CSP networks in five years, based on results of a Brocade-sponsored survey, says Heavy Reading's Caroline Chappell.
LRTV Custom TV
The New IP Gains Traction With CSPs

7|2|15   |   1:42   |   (0) comments


Roz Roseboro of Heavy Reading analyzes results of a Light Reading survey sponsored by Brocade showing that CSPs are getting serious about making the transition to the New IP era.
LRTV Custom TV
It's (Real) Time for Analytics

7|2|15   |   1:42   |   (0) comments


Heavy Reading's Jim Hodges looks at how CSPs say they plan to use analytics to deploy new services in real time as part of The New IP, based on results of a survey sponsored by Brocade.
LRTV Documentaries
IoT in Action

6|30|15   |   1:39   |   (7) comments


Two co-workers discuss the benefits of IoT technology.
LRTV Interviews
Ericsson Opens Up on OPNFV

6|30|15   |   14:16   |   (1) comment


Martin Bäckström, VP and head of industry area Datacom at Ericsson, talks to Light Reading founder and CEO Steve Saunders about the emergence of OPNFV, the importance of standards and Ericsson's OPNFV plans.
LRTV Custom TV
NetNumber Founder Discusses NFV/SDN Impact on SP Networks

6|26|15   |   4:15   |   (0) comments


NetNumber Founder Doug Ranalli examines why SPs need a new network infrastructure for service agility. While NFV and SDN are the tools, the old ways of thinking about signaling control are inhibitors. Doug provides his recommendations.
LRTV Custom TV
Orchestrating NFV vCPE Services Across Multivendor Networks

6|26|15   |   5:46   |   (0) comments


Nirav Modi provides an overview of vCPE, the fastest-growing NFV use case, showing how Cyan's Blue Planet orchestrates vCPE services across a multivendor infrastructure to rapidly deliver new managed services for business customers.
LRTV Custom TV
ZTE at LTE Summit Amsterdam 2015

6|26|15   |     |   (0) comments


As one of the leading global telecommunications providers, ZTE presented its cutting-edge technology at LTE World Summit 2015 in Amsterdam. On display at ZTE's booth were the latest R&D achievements in wireless, 5G development, HetNet, deep convergence of FDD and TDD, and RCS/IMD/iSDN/vCN.
Upcoming Live Events
September 16-17, 2015, The Westin Galleria Dallas, Dallas, TX
September 29-30, 2015, The Westin Grand Müchen, Munich, Germany
October 6, 2015, The Westin Peachtree Plaza, Atlanta, GA
October 6, 2015, Westin Peachtree Plaza, Atlanta, GA
October 14-15, 2015, New Orleans Ernest N. Morial Convention Center, New Orleans, LA
November 5, 2015, Hilton Santa Clara, Santa Clara, CA
All Upcoming Live Events
Infographics
Hot Topics
Who's Feeding Fiber to LinkNYC Hotspots?
Mari Silbey, Senior Editor, Cable/Video, 6/29/2015
Colt to Jettison Ailing IT Business
Iain Morris, News Editor, 6/30/2015
Eurobites: Activist Investor Takes Stake in AlcaLu
Paul Rainford, Assistant Editor, Europe, 6/30/2015
What's a Gigabit Good For?
Carol Wilson, Editor-at-large, 7/1/2015
Like Us on Facebook
Twitter Feed
Webinar Archive
BETWEEN THE CEOs - Executive Interviews
Casa Systems has been going from strength to strength over the last couple of years. In 2013, it became the first vendor to ship an integrated CCAP device -- the ...
Cedrik Neike, SVP of Global Service Provider, Service Delivery, at Cisco, talks to Light Reading founder and CEO Steve Saunders about solving service provider customer problems in a virtualized, DevOps world, including multivendor support and the future of network procurement.
Cats with Phones