AT&T is Reportedly Considering Selling DIRECTV’s Satellite Service
Today The Wall Street Journal reported that AT&T is entertaining the possibility of selling its DIRECTV
satellite service. According to the report, AT&T is “exploring parting
ways with DIRECTV.” This comes a day after Dish Chairman Charlie Ergen said
that a merged DIRECTV
and Dish combo has “always made sense,” but has always faced the challenge of regulatory approval.
Even though AT&T is
reportedly looking to sell its DIRECTV satellite service, it seems doubtful
that Dish would be a suitable buyer. This week at the Bank of America Merrill
Lynch conference, AT&T’s
CFO John Stephens replied to a question about Dish buying DIRECTV.
“So there’s been some stories out
there about the industrial logic about putting two satellite providers,” Stephens
said. “That’s been tried from a regulatory perspective. It hasn’t been successful,
and I don’t know that there’s any change in that regulatory perspective. So
understanding industrial
logic, put quite frankly, it’s been tried and has been rejected.”
it expects to lose over a million TV customers during the 3rd quarter of 2019.
This sale may be a way to try and cut costs as DIRECTV continues to bleed
subscribers.
Now, this would not mean AT&T
would be getting out of TV. Reports are that AT&T would plan to keep the
new AT&T TV streaming service and its sister service AT&T
TV NOW.
This news comes as the investment
group Elliott Management announced it now owns $3.2 billion of AT&T stock
and that it’s pushing for AT&T to sell off DIRECT. According to this long
letter, AT&T purchased DIRECTV at its peak, and it’s streaming version
DIRECTV NOW (now
for AT&T to sell off DIRECTV.
Here is the part in the letter from Elliott Management that talks
About AT&T:
Beyond the wireless issues
detailed above, AT&T has suffered from product issues in other business
units that have hampered its ability to remain competitive:
DirecTV Over-the-Top (OTT) Issues: AT&T’s OTT offering,
delays, technical mishaps, weak customer service and usability issues. Despite
natural-substitution narrative has not played out. While unsustainably low
prices and aggressive promotion did initially help the product scale, the
benefits turned out to be very short term in nature. As AT&T raised prices
to normalized
levels, results rapidly deteriorated. After just two years of existence
amidst an otherwise-booming OTT market, DirecTV NOW’s
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