\tSpeculation on the future of AT&T\u2019s DirecTV unit intensified after a report emerged indicating the US operator was considering parting ways with the struggling satellite provider it acquired for $49 billion four years ago. [1]\n
Wall Street Journal reported the US operator was mulling various options for DirecTV, including a possible sale to rival Dish Network or spinning out the business into a separate public company.<\/p>\n
However, Reuters, citing a person familiar with the matter, threw cold water on a possible tie-up with Dish, citing possible regulatory issues making the move highly unlikely.<\/p>\n
AT&T CFO John Stephens also suggested last week that while there had been speculation about putting two satellite providers together, it would be difficult from a regulatory perspective.<\/p>\n
Indeed, Dish attempted to combine with DirecTV in 2014, but ultimately lost out to AT&T.<\/p>\n
A spin-off appears a more likely route, although that would not happen until 2020 to make it more tax efficient for the operator.<\/p>\n
Elliott concerns
\nAT&T\u2019s DirecTV unit was thrown into the spotlight when shareholder Elliott Management attacked the operator\u2019s M&A activity [2], questioning why it needed to own content assets Time Warner and DirecTV.<\/p>\n
That, coupled with the fact the company lost almost 800,000 premium TV subscribers in Q2, including DirecTV users, has seemingly forced AT&T to look at its strategy.<\/p>\n
In response [3] to Elliott\u2019s criticism, AT&T CEO Randall Stephenson backed its big money media buys, but did concede that some of the points raised by the investor would be looked at.<\/p>\n
Immediately after acquisition DirecTV was seen as a key pillar of the operator\u2019s content and media play, though it has since struggled to compete with online streaming services including Netflix and Amazon Prime.<\/p>\n
WSJ added ultimately, AT&T could decide to keep DirecTV in its ranks. The unit is part of the company\u2019s entertainment and consumer wireline unit, which made up 27 per cent of the company\u2019s total $173.3 billion revenue in 2018.<\/p>\n
AT&T has previously defended DirecTV\u2019s performance, pointing out it has millions of subscribers and helps its convergence play to combine fibre optic TV customers and mobile users.<\/p>\n[1] https:\/\/www.mobileworldlive.com\/featured-content\/top-three\/att-moves-fast-with-new-converged-plan-following-directv-deal\/
\n[2] https:\/\/www.mobileworldlive.com\/featured-content\/top-three\/att-shareholder-attacks-strategy\/
\n[3] https:\/\/www.mobileworldlive.com\/featured-content\/top-three\/att-chief-defends-strategy-in-face-of-investor-unrest\/<\/p>\n","protected":false},"excerpt":{"rendered":"
Speculation on the future of AT&T’s DirecTV unit intensified after a report emerged indicating the …<\/p>\n
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