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AT&T Agrees to Purchase DirecTV (Was: ATT looking to buy Direct TV)


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#301 OFFLINE   slice1900

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Posted 15 May 2014 - 10:51 PM

But now we're moving into LTE... is it really way better than all other technologies currently in use?

 

Sure it is, it is more spectrum efficient (more bits per MHz) It is like cable switching from QAM64 to QAM256, or converting from MPEG2 to MPEG4. You make better use of the same resources.

 

The big gain will be when they move to VoLTE, because the way voice is handled currently uses up a lot more spectrum than the amount of data being passed (modelling after circuit switched POTS calls, rather than VOIP packet switched calls) There are a ton of frequencies sitting idle most of the time to support peak calling volume, which will be available for data when not being used for voice.

 

However, since voice traffic will have priority, peak calling volumes will be far far higher than before - fewer problems making/receiving calls in football stadiums or during emergencies (like after the Boston marathon bombing) All the bandwidth currently reserved for data will be available for calling - data traffic might slow to a crawl, but making calls is probably more important than someone posting Instagram pics.


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#302 OFFLINE   Laxguy

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Posted 15 May 2014 - 11:21 PM

Heh. Thanks for the expo..
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#303 OFFLINE   inkahauts

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Posted 15 May 2014 - 11:25 PM

The articles are mostly seeing a benefit to AT&T but at the same time, they note that AT&T already offers cable TV service. The purchase only buys the money printing press that is DIRECTV. It doesn't buy new markets to exploit like a Comcast-TWC or Charter buyout would.

It would be interesting indeed to see what happened with a different DIRECTV Board of Directors configuration seeded with AT&T personnel and minus Mr. White.

 

On what planet is that true?  There is huge amount of area ATT will never be able to offer uverse tv to, but with the merger with Directv they would be able to offer tv to tens of millions (if not hundred million or more) of more people than they do now.  



#304 OFFLINE   slice1900

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Posted 16 May 2014 - 02:19 AM

On what planet is that true?  There is huge amount of area ATT will never be able to offer uverse tv to, but with the merger with Directv they would be able to offer tv to tens of millions (if not hundred million or more) of more people than they do now.  

 

Yes, they have a potential base of most of the country, but they have high penetration in some areas (like LA) and low penetration in others. Why is that? I think it is because of national pricing. Cable companies don't do national pricing. If two people who live in different parts of the country both subscribe to Comcast they probably don't pay the same, depending on their markets. One may have a couple competing cable companies plus a telco alternative like FIOS. Another may have just the one cable company in town, lots of trees everywhere making satellite a bad choice and no telco TV offering. Comcast is going to stick it to the guy with no alternative, but is forced to keep their prices competitive where they have to if they want to get customers.

 

What if Directv priced that way? Maybe that's why there are so many subscribers in LA - if the cable companies charge more (due to cost of living, lack of competition, whatever) but other places where the cable prices are low maybe Directv has few subscribers since they're priced way out of line with cable TV.

 

Directv has a fixed overhead for operating satellites which doesn't change whether they have 1 million or 100 million subscribers. Each subscriber has a fixed acquisition cost (installation, free Genie, etc.) which is pretty high (they state it is over $800) so in order to pay all those fixed costs the gross margin on the service needs to be pretty damn good. They have to pay for programming per subscriber (I assume?) and of course with more subscribers you need more CSRs etc. but those are probably pretty small compared to the monthly charges so additional customers are pretty profitable if they stick around beyond their two year commitment. So what if they lowered their prices 25% in some city where there's a lot of cable competition and pricing is low. Maybe today they have only 5% of the households in that city because their prices are out of line, but were able to jump that up to 15% with the price drop. Would that be worth it? Hell yeah, that would be hugely profitable!

 

Directv could have done that themselves, and they haven't, but maybe if AT&T buys them and thinks more like a cable company than a satellite company, changes like that might happen. Whether that's good or not is another matter, but it would be interesting to see. It has always mystified me why Directv and Dish do national pricing, when many industries (think airlines) spend hundreds of millions on figuring out how to maximize revenue through extreme price discrimination. It is only recently they even bothered accounting for the different cost of sports in different areas.

 

I'm sure some will say this would be a terrible idea, that customers will be pissed if they find out they're paying more than a guy in another city, or maybe even more than the guy across the street. But anytime you fly you can be pretty certain some people on that flight - maybe a lot of them - paid less for their ticket than you did. Maybe if Directv did this there would be some initial shock and outrage, but they'd get over it pretty quickly and it would just be something you were used to.


Edited by slice1900, 16 May 2014 - 02:22 AM.

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#305 OFFLINE   unixguru

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Posted 16 May 2014 - 07:38 AM

Don't assume that a wireless system that is used for att cellular is what they want to use for Internet etc. it's not. You are thinking f today, they are thinking tomorrow on this. Why do you think they all want some tv bandwidth? It will happen at some point because no one is affording running next gen fiber to everyone's home in this country.

 

This deal has nothing to do with internet or phone and satellite.  Even if they could put up a system with terabits/sec both up and down they still can't erase the laws of physics.  TOF (time of flight).  The sats are a long way away and it takes time for any signal to travel up and down - seconds.  A phone call over geostationary sat would be like walkie talkie - "over".  Internet satellite is available today and it is absolutely terrible; nobody uses it unless there is no other "broadband" available.

 

Tv spectrum that is desirable is terrestrial (ground), not satellite.  They can't use satellite spectrum for ground-based and vice versa.

 

No fiber to homes?  The same was said once about water, sewer, gas, power, telephone, cable.  They will run fiber to homes eventually.


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#306 OFFLINE   harsh

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Posted 16 May 2014 - 08:28 AM

On what planet is that true?  There is huge amount of area ATT will never be able to offer uverse tv to, but with the merger with Directv they would be able to offer tv to tens of millions (if not hundred million or more) of more people than they do now.

How many are going to be able to/want to install a dish to get their TV that haven't already?

What happens to DIRECTV rates, already averaging above the $100 mark, when AT&T wants their cut? Do you honestly think that the insertion of AT&T at any level is going to make DIRECTV more attractive to uVerse or DIRECTV customers?

To customers of their competitors?

Of those who have expressed an opinion, the answer seems to be a resounding "no you didn't".

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#307 ONLINE   Athlon646464

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Posted 16 May 2014 - 10:31 AM

Interesting slant and a positive outlook if the acquisition happens (Forbes).


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#308 OFFLINE   wingrider01

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Posted 16 May 2014 - 10:57 AM

This deal has nothing to do with internet or phone and satellite.  Even if they could put up a system with terabits/sec both up and down they still can't erase the laws of physics.  TOF (time of flight).  The sats are a long way away and it takes time for any signal to travel up and down - seconds.  A phone call over geostationary sat would be like walkie talkie - "over".  Internet satellite is available today and it is absolutely terrible; nobody uses it unless there is no other "broadband" available.

 

Tv spectrum that is desirable is terrestrial (ground), not satellite.  They can't use satellite spectrum for ground-based and vice versa.

 

No fiber to homes?  The same was said once about water, sewer, gas, power, telephone, cable.  They will run fiber to homes eventually.

 

they already are in some locations -  they are spending a ton of money in certain rollout cities for giga-fiber to the dmark.



#309 OFFLINE   slice1900

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Posted 16 May 2014 - 02:26 PM

How many are going to be able to/want to install a dish to get their TV that haven't already?

What happens to DIRECTV rates, already averaging above the $100 mark, when AT&T wants their cut? Do you honestly think that the insertion of AT&T at any level is going to make DIRECTV more attractive to uVerse or DIRECTV customers?

To customers of their competitors?

Of those who have expressed an opinion, the answer seems to be a resounding "no you didn't".

 

AT&T would become the owner. They don't take a "cut", they take 100% of the profits that are currently either retained or used for buybacks. So there's no reason Directv rates should go up.

 

You don't understand business very well if you think that a company that "needs" more profit to pay middlemen could just raise their rates. Go tell the owner of every business that's losing money that the solution is simple: charge more. They'll thank you for your keen business insight!  :nono2:

 

If rates go up, some customers leave. If you make more money with higher rates than you lose from customers that leave, then from a business standpoint it makes financial sense to raise your rates. If rates go down, you'll get more customers. If you make more money from the additional customers than you lose from lower rates, then it makes financial sense to lower your rates (which in a business that raises rates yearly might be a smaller/no increase rather than an actual cut) Every business hopes to find that point where their profit is maximized.

 

Perhaps AT&T beancounters might have a different evaluation of whether Directv is above or below that profit maximizing point than Directv's beancounters do. If so, they might decide to raise or lower rates if/when they're in charge.


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#310 OFFLINE   CraigerM

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Posted 16 May 2014 - 06:36 PM

Found this interesting about the deal:

 

http://www.bloomberg...signal-dystopia

 

"The perfect telecom provider should have a satellite fleet, a mobile network, a fiber optic infrastructure and a web of WiFi hot spots. It can then concentrate on providing some kind of connectivity everywhere."



#311 OFFLINE   slice1900

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Posted 16 May 2014 - 09:40 PM

Found this interesting about the deal:

 

http://www.bloomberg...signal-dystopia

 

"The perfect telecom provider should have a satellite fleet, a mobile network, a fiber optic infrastructure and a web of WiFi hot spots. It can then concentrate on providing some kind of connectivity everywhere."

 

Eh, I discount the author as ignorant since he seems to think buying Directv will allow "use of satellites to bridge gaps in cellular networks". He clearly has no concept of the difference between GSO and LEO. I know phones keep getting bigger, but probably won't get big enough to stick a satellite dish on it, not to mention having to keep that dish pointed at the correct spot in the sky!

 

You need something like what Teledesic and Iridium tried to do for what he's talking about.

 

I do find it interesting how many theories there are. Normally it is pretty obvious what is behind a company's acquisition strategy, but this time it is a more of a mystery. I wonder if AT&T will announce the reasons after the purchase is approved (assumed the deal gets done and the FCC approves it) or on the following earnings call, or keep it close to the vest for a while to keep the competition in the dark?


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#312 OFFLINE   Rob

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Posted 17 May 2014 - 08:55 AM

http://www.buzzfeed....uisition-sunday

 

 

AT&T is on track to announce its acquisition of the satellite company DirectTV this Sunday, before markets open Monday and sooner than many observers anticipated, a source familiar with DirecTV’s plans told BuzzFeed.

“The deal is done,” the source said, adding that DirecTV CEO Mike White has already informed senior executives that the deal is finished and plans to give public confirmation Sunday.


It's only tv!

#313 OFFLINE   JosephB

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Posted 17 May 2014 - 09:42 AM

Eh, I discount the author as ignorant since he seems to think buying Directv will allow "use of satellites to bridge gaps in cellular networks". He clearly has no concept of the difference between GSO and LEO. I know phones keep getting bigger, but probably won't get big enough to stick a satellite dish on it, not to mention having to keep that dish pointed at the correct spot in the sky!

 

You need something like what Teledesic and Iridium tried to do for what he's talking about.

 

I do find it interesting how many theories there are. Normally it is pretty obvious what is behind a company's acquisition strategy, but this time it is a more of a mystery. I wonder if AT&T will announce the reasons after the purchase is approved (assumed the deal gets done and the FCC approves it) or on the following earnings call, or keep it close to the vest for a while to keep the competition in the dark?

 

They would say what their rationale is when the deal is announced. They'll probably talk about synergies and taking costs out and blah blah, but it's really all about getting access to DirecTV's money printer. DirecTV generates something like $2 billion in free cash flow every year, and that is money that AT&T can use to pay dividends, buy wireless spectrum, or buy other companies. I'm sure they will take out duplication where it makes sense (customer service, installation network, and there is some chance that they will offer DirecTV in lieu of IPTV over U-Verse so that you can get a higher U-Verse internet tier, but I don't know if they will completely abandon U-Verse TV (they likely have a lot of customers in MDUs and other situations where a dish is not feasible), and this is most likely just a financial engineering ploy, intertwined with a TV consolidation storyline.



#314 OFFLINE   CraigerM

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Posted 17 May 2014 - 10:08 AM

Just thought of something, I wonder how many UVerse TV would leave if they kept DTV and got rid of UVerse TV because they would find out now they have a $25 Advanced Receiver Fee when the HD DVR was included for free with UVerse TV?



#315 ONLINE   sigma1914

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Posted 17 May 2014 - 10:12 AM

Just thought of something, I wonder how many UVerse TV would leave if they kept DTV and got rid of UVerse TV because they would find out now they have a $25 Advanced Receiver Fee when the HD DVR was included for free with UVerse TV?

It's not included with Uverse. HD is only included into the highest tier called U450. Total home DVR fee is $15 with the Basic tier and free in the others.

 

 

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#316 OFFLINE   CraigerM

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Posted 17 May 2014 - 10:18 AM

It's not included with Uverse.

On the ad it says get a free DVR for life.



#317 ONLINE   Athlon646464

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Posted 17 May 2014 - 10:20 AM

IMHO, I don't think we'll (current subs) see anything different for quite some time (year or two or three).  The first year will be all about getting the deal approved in Washington.  Years two & three will see 95% business as usual.

 

Then, as AT&T usually does given their history, will sell D* at a discount sometime after that (in four or five years).  Who knows, Mr. White could even buy it back then.  :hurah:

 

And who knows what sort of content delivery systems we'll be using in five years.  Should be very interesting.  Just my 2 cents...

 

logo_att_directv.gifdirectv-att.jpg

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#318 OFFLINE   Paul Secic

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Posted 17 May 2014 - 10:22 AM

It's not included with Uverse.

Uverse's boxes are junk.


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#319 OFFLINE   CraigerM

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Posted 17 May 2014 - 10:24 AM

Uverse's boxes are junk.

How are they junk? I know they don't have tuners in them since they connect to their RG.



#320 ONLINE   sigma1914

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Posted 17 May 2014 - 10:26 AM

How are they junk? I know they don't have tuners in them since they connect to their RG.

They're slow with bad software design. Navigation is cumbersome.


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