AT&T’s DirecTV Acquisition: Perspectives
Speaking at the J.P. Morgan Global Technology, Media and Telecom Conference, AT&T CFO John Stephens said that the DirecTV deal will provide the two companies with the opportunity to deliver a superior video product by giving them the chance to streamline set-top box development and improve the quality of the user interface.
Stephens promises the best of both worlds (AT&T’s U-Verse and DirecTV’s satellite offer) for TV/video customers following the $48,5 Bn takeover. He expects the new company to have a great deal of leverage when it comes to content negotiations, since they now provide an audience of nearly 70 Mn viewers. This expectation will be put to the test in the current negotiations with the NFL for exclusive sunday broadcast rights.
In a more critical view on the merger, Neil Begley of Moody’s states that AT&T’s wireline network and the DirecTV satellite network will not be able to be integrated and AT&T’s wireline network will require more fiber optic investment in the last mile to be competitive in the long-term.
Media analyst Craig Moffett predicts some regulatory obstacles the new media giant will have to take: The consolidated pay-TV customer base of 25 Mn won’t be a problem. However in some markets where DirecTV and U-verse are the only alternatives to cable – or the only pay TV options at all, the FCC will probably take action. Moffett believes however, that th regulators will not nix another major AT&T deal, after it stopped the T-Mobile USA merger in 2011.
For an overview of the wheeling and dealing in the cable/telco industry, be sure to check out this article.