Earlier last week, we reported AT&T’s interest in acquiring DirecTV. AT&T just reached an agreement to buy satellite provider DirecTV for $48.5 billion dollars. The purchase would enable AT&T to have access to DirecTV’s 20 Million satellite subscribers, and also filling the gap in the internet video space which AT&T is currently lacking. This purchase would also give AT&T a major video service option with DirecTV being one of the nation’s leaders. Even though AT&T does offer current customers U-Verse, its own version of a video service, it is in no way on the same level as DirecTV and its satellite options.
By making this move, AT&T would be able to offer its services on all video platforms. It will allow much greater and more improved video content for televisions and cable programming, streaming and mobile video content for phones which is now where the trend is heading towards, and also in the air on airplanes that use DirecTV as a supplier. This news comes a few months after we heard that Comcast offered $45 billion for Time Warner Cable, a move that would make Comcast the leading internet cable provider, which is currently in the waiting phase for regulatory approval.
The biggest advantage of this potential purchase will be the extra liquidity of funds on hand when it becomes time for the FCC Spectrum auction. According to the press release by AT&T “The transaction does not alter AT&T’s plans to meaningfully participate in the FCC’s planned spectrum auctions later this year and in 2015. AT&T intends to bid at least $9 billion in connection with the 2015 incentive auction provided there is sufficient spectrum available in the auction to provide AT&T a viable path to at least a 2×10 MHz nationwide spectrum footprint.”
There are three potential main winners and there also might be one loser in the end as well. The winners, AT&T for buying out more competition and expanding their network, Warren Buffet and his company Berkshire Hathaway who is the largest shareholder of DirecTV, and in the beginning the consumer who will get a lot more services from one organization which will make it more convenient for them. The loser can end up being the consumer as well, because with less competition the supply decreases and the prices can go up with only choices being paying it, or switching to barely no other competitors out there.
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