Story by the Associated Press; curated by Dave Urbanski
DALLAS (AP) — AT&T said it’s buying DirecTV for $95 per share, or $49 billion — a move that gives the telecommunications company a larger base of video subscribers and increases its ability to compete against Comcast and Time Warner Cable, which agreed to a merger in February.
Dallas-based AT&T’s proposed combination could improve its Internet service by pushing its existing U-verse TV subscribers into video over satellite service, and thereby free up bandwidth on its telecommunications network.
AT&T currently offers a high-speed Internet plan in a bundle with DirecTV television service. The acquisition would help it further reap the benefits of that alliance.
“This deal is about getting more money from the same customers,” Roger Entner, an analyst at Recon Analytics, told USA Today. “We are running out of people who want to buy wireless service.”
More from USA Today:
The merger is the latest evidence of TV-industry consolidation that underscores telecommunications companies’ desire to amass customers and control content and delivery. With streaming and wireless technology upending the industry, cable and satellite service providers are rushing to add product options while boosting revenue per customer to please shareholders.
DirecTV would continue to be based in El Segundo, California, following the merger. The companies expect the deal to close within 12 months following a government review.
More from USA Today:
AT&T U-Verse’s TV service, has about 5.7 million customers in 22 states. DirecTV, with about 20 million customers nationwide, is the second-largest pay-TV provider — behind Comcast — and the largest satellite TV company in the U.S. DirecTV also has 18 million customers in Latin America and offers AT&T an immediate access to that fast-growing market.
Their negotiation follows a deal struck earlier this year by Comcast to buy Time Warner Cable for about $45 billion, a transaction that would merge the nation’s two largest cable companies.
With consumer groups loudly opposing media industry consolidation, AT&T and DirecTV could face regulatory roadblocks. AT&T’s acquisition of DirecTV eliminates a competitor in AT&T U-Verse’s markets.