AT&T Merger Sets Up Godzilla-Sized Showdown With Comcast
As had been speculated, AT&T (NYSE:T) pulled the trigger on a merger with satellite television provider DirecTV (NASDAQ:DTV) in a $48.5 billion acquisition that is set to see the two companies combine to become a telecom powerhouse. DirecTV is the country’s top satellite television provider, with 20 million subscribers, and gives AT&T a new avenue for growth in the face of stagnating cellular subscribers and a limited television distribution reach. Pending regulatory approval, the merger would rival only Comcast (NASDAQ:CMCSA) and Time Warner Cable’s (NYSE:TWC) recently-announced merger in both scope and scale.
With two mega-mergers announced as of late, all signs are pointing towards an era in the television and broadband industries in which survival looks to hinge on consolidation. By adding diversified services across different mediums, both AT&T and Comcast are taking measures to ensure their long-term survival in the face of shifting consumer demand and technological advances.
AT&T’s move is an attempt to broaden its bases in order to better meet those shifting customer demands, as CEO Randall Stephenson explained on a conference call, according to Reuters. “It gives us the parts to fulfill a vision we have had for a couple of years — that is, the opportunity and the ability to take premium content and deliver premium content over multiple points for the customer, whether it be through a smartphone, through a tablet, or television, or laptop,” he said.