Friday, May 2, 2014

Is DirecTv and AT&T The Next Cable Merger?

With all the talk centered around Comcast's proposed acquisition of Time Warner Cable, the news that AT&T might be interested in DirecTv may have come as no surprise.  Given that a larger Comcast would cover more than 30 mm subscribers, another competitive presence would be needed to keep them in check.  Some wondered if a DirecTv and Dish Network merger would be the possible solution.  The problem is that they lack a broadband business to match the size of Comcast.  With AT&T and DirecTV, more synergy occurs, enabling this possible new entity to better sell a triple play of services.  And perhaps it may get Verizon itching to do something similar.  Could a FIOS and Dish Network business model be the next possibility?

Whether any of this happens remains to be seen.  How real an AT&T and DirecTv deal is remains to be seen.  Some even think that AT&T would prefer to hook up with Dish.  The idea for either is valid.  To compete with Comcast and a post Time Warner Cable acquisition, the need to get bigger quickly seems of utmost importance.

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