Ares
18th May 2014, 06:01 PM
DirecTV, the US’s largest satellite TV company, and AT&T, the second-largest wireless provider, due to finalise details of long-rumoured merger
Executives from AT&T and DirecTV were reportedly close to announcing a $50bn merger on Sunday, the latest in a series of media and telecoms deals that have rattled consumer groups and attracted regulatory scrutiny.
The boards of DirecTV, the US’s largest satellite TV company, and AT&T, the second-largest wireless provider, were due to meet on Sunday to attempt to finalise details of the long-rumoured merger, according to BuzzFeed.
With more than 20 million subscribers in the US and 18 million more in Latin America, DirecTV is the second-largest pay-TV provider behind Comcast, which is currently negotiating the takeover of its second biggest cable rival, Time Warner Cable (TWC).
A deal with AT&T would give DirecTV the ability to package phone and internet service the way cable companies do. AT&T already runs a television service, U-Verse, but with 5.7 million customers it is tiny in comparison to DirecTV.
Any deal is likely to spark regulatory scrutiny. The Federal Communications Commission (FCC) is already examining Comcast and TWC’s proposed merger, which has sparked widespread protests from consumer groups concerned about further loss of competition in an already consolidated industry.
Craig Aaron, president of the open-internet advocacy group Free Press, said: “The captains of our communications industry have clearly run out of ideas. Instead of innovating and investing in their networks, companies like AT&T and Comcast are simply buying up the competition. These takeovers are expensive, and consumers end up footing the bill for merger mania.
"For the amount of money and debt AT&T and Comcast are collectively shelling out for their respective mega-deals, they could deploy super-fast gigabit fiber broadband service to every single home in America. This is not about providing better services or even connecting more Americans. It's about eliminating the last shred of competition in a communications sector that's already dominated by too few players.”
AT&T has been looking for deals since a $39bn takeover of T-Mobile was blocked in 2011, on the grounds it would overly concentrate the wireless industry. The company had been expected to make a bid for the UK’s Vodafone but appears to have shifted its focus after the announcement of the Comcast/TWC deal. In March, AT&T chief executive Randall Stephenson called that merger an "industry-redefining deal" and said AT&T would react by concentrating investment in its high-speed cable delivery services.
There was also some skepticism on the deal from Wall Street. Writing before Sunday’s news Craig Moffett, an analyst at MoffettNathanson Research, wrote: “Like any merger born of necessity rather than opportunity, the combination of AT&T and DirecTV calls to mind images of lifeboats and rescues at sea.”
http://www.theguardian.com/business/2014/may/18/att-directv-50bn-merger
Executives from AT&T and DirecTV were reportedly close to announcing a $50bn merger on Sunday, the latest in a series of media and telecoms deals that have rattled consumer groups and attracted regulatory scrutiny.
The boards of DirecTV, the US’s largest satellite TV company, and AT&T, the second-largest wireless provider, were due to meet on Sunday to attempt to finalise details of the long-rumoured merger, according to BuzzFeed.
With more than 20 million subscribers in the US and 18 million more in Latin America, DirecTV is the second-largest pay-TV provider behind Comcast, which is currently negotiating the takeover of its second biggest cable rival, Time Warner Cable (TWC).
A deal with AT&T would give DirecTV the ability to package phone and internet service the way cable companies do. AT&T already runs a television service, U-Verse, but with 5.7 million customers it is tiny in comparison to DirecTV.
Any deal is likely to spark regulatory scrutiny. The Federal Communications Commission (FCC) is already examining Comcast and TWC’s proposed merger, which has sparked widespread protests from consumer groups concerned about further loss of competition in an already consolidated industry.
Craig Aaron, president of the open-internet advocacy group Free Press, said: “The captains of our communications industry have clearly run out of ideas. Instead of innovating and investing in their networks, companies like AT&T and Comcast are simply buying up the competition. These takeovers are expensive, and consumers end up footing the bill for merger mania.
"For the amount of money and debt AT&T and Comcast are collectively shelling out for their respective mega-deals, they could deploy super-fast gigabit fiber broadband service to every single home in America. This is not about providing better services or even connecting more Americans. It's about eliminating the last shred of competition in a communications sector that's already dominated by too few players.”
AT&T has been looking for deals since a $39bn takeover of T-Mobile was blocked in 2011, on the grounds it would overly concentrate the wireless industry. The company had been expected to make a bid for the UK’s Vodafone but appears to have shifted its focus after the announcement of the Comcast/TWC deal. In March, AT&T chief executive Randall Stephenson called that merger an "industry-redefining deal" and said AT&T would react by concentrating investment in its high-speed cable delivery services.
There was also some skepticism on the deal from Wall Street. Writing before Sunday’s news Craig Moffett, an analyst at MoffettNathanson Research, wrote: “Like any merger born of necessity rather than opportunity, the combination of AT&T and DirecTV calls to mind images of lifeboats and rescues at sea.”
http://www.theguardian.com/business/2014/may/18/att-directv-50bn-merger