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


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#701 OFFLINE   SayWhat?

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Posted 04 June 2014 - 11:18 AM

FierceTelecom
46 minutes ago
             
AT&T (NYSE: T) has made another concession to get regulatory approval of its $48.5 million proposal to acquire DirecTV (NASDAQ: DTV) by promising that it would extend fiber to the home (FTTH) services to more locations.

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#702 OFFLINE   Tom Servo

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Posted 04 June 2014 - 06:05 PM

A better offer (bribe) would be bringing FTTH to every single AT&T customer, even the ones who have no U-verse in their area yet.



#703 OFFLINE   harsh

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Posted 05 June 2014 - 07:42 AM

A better offer (bribe) would be bringing FTTH to every single AT&T customer, even the ones who have no U-verse in their area yet.

The goal should be broader coverage, not so much better service to existing customers.

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#704 OFFLINE   Laxguy

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Posted 05 June 2014 - 09:16 AM

 

FierceTelecom
46 minutes ago
             
AT&T (NYSE: T) has made another concession to get regulatory approval of its $48.5 million proposal to acquire DirecTV (NASDAQ: DTV) by promising that it would extend fiber to the home (FTTH) services to more locations.

 

I am wondering just how the acquisition would make it any easier to extend or complete fiber. Arguably, they'd have more money to do installations if they didn't buy DIRECTV®....

 

In a regulatory filing, AT&T said that completing the DirecTV deal would enable it to upgrade 2 million homes to the fiber-based Gigapower broadband service, while expanding broadband coverage overall to 13 million locations.


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#705 OFFLINE   Rich

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Posted 05 June 2014 - 09:35 AM

I am wondering just how the acquisition would make it any easier to extend or complete fiber. Arguably, they'd have more money to do installations if they didn't buy DIRECTV®....

 

I don't understand what corporations are doing most of the time.  We got bought out by a larger chemical company, Dow, that assumed something like 5 or 6 BILLION dollars of debt that we owed for various reasons, mostly poor management.  But, Dow made it work, somehow.  I thought all that debt would drag them down too, but they prosper and I keep making more money on their stock.  Blind luck on my part, but they sure seem to know what they are doing.

 

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#706 OFFLINE   Laxguy

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Posted 05 June 2014 - 10:23 AM

Debt works in a company's favor when they can increase their Return on Assets (Investments) above the cost of the debt. If it's the opposite, then debt is a killer. 

 

The reporter can not have it right. ATT won't be more able to build out FIOS due to the acquisition. 


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#707 OFFLINE   Diana C

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Posted 05 June 2014 - 11:30 AM

DirecTV currently generates a fairly good profit margin...AT&T would now get the benefit of that cash flow, which would improve its profit margin.  Acquisition costs show up on the balance sheet elsewhere but have the effect of lowering the tax liability in many cases.  While none of this will seriously bankroll a major fiber expansion, it provides a fig leaf to cover up the fact that this is just pandering to the regulators. :)


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#708 OFFLINE   Laxguy

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Posted 05 June 2014 - 11:35 AM

Cash flow and profits can vary widely in either direction! 

 

Pandering.... A major company pandering??? Tell me it ain't so!

 

:)


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#709 OFFLINE   nmetro

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Posted 05 June 2014 - 12:35 PM

So, what this looks like is AT&T is going to do for fiber, what the original AT&T did for land lines. They are going to create a new Bell System. Smaller fiber operators will be probably  be gobbled up by AT&T. Ad for DirecTV, the subscriber base will subsidize this and probably see very little being reinvested into DirecTV in regards to infrastructure, new technology, etc. So, DirecTV may end up being a shell of its former self.

 

I am very glad my city is setting up its residents to our city owned fiber network. My city will do for fiber, what they did for electricity, offer low rates without answering to stockholders; and do a great job at it.



#710 OFFLINE   Laxguy

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Posted 05 June 2014 - 01:02 PM

I hope you're right on the latter and wrong on the former!


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#711 OFFLINE   slice1900

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Posted 05 June 2014 - 01:12 PM

Not investing in Directv would be pretty short sighted, as the cash flow they're getting today would be cut back pretty quickly if they let it rot.

 

Since this deal is mostly stock, adding a subsidiary that a $4 billion yearly cash flow helps with their ability to borrow money to do these types of upgrades. AT&T knows Verizon's FTTH strategy is superior for offering TV services, so that's their long range goal, but owning Directv will allow them to deliver TV to a lot of those customers while the fiber is being built out and help keep them from switching to cable.


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#712 OFFLINE   SteveHas

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Posted 05 June 2014 - 03:07 PM

So shouldn't this really read

"By taking profits out of D* we might build fiber"

 

previously these profits went to D* and investment in the quality of our service

This story just seems to reinforce the downside of this deal to me


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#713 OFFLINE   slice1900

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Posted 05 June 2014 - 04:07 PM

So shouldn't this really read

"By taking profits out of D* we might build fiber"

 

previously these profits went to D* and investment in the quality of our service

This story just seems to reinforce the downside of this deal to me

 

Most of the profits went to stock buybacks (i.e. to the stockholders) not to investment in the "quality of service". Your concern would only be valid if Directv had been previously operated at a non-profit.


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#714 OFFLINE   Drucifer

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Posted 05 June 2014 - 06:24 PM

[SNIP]

by promising that it would extend fiber to the home (FTTH) services to more locations.


Bet that doesn't include areas served by Verizon - AKA, my area.


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#715 OFFLINE   gt2982a

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Posted 05 June 2014 - 06:31 PM

No one said ATT was stupid.  Max FTTH home speeds right now are 24/3, yet their Power Tier can achieve 45/6 over copper.  Think of the bandwidth savings if ATT converts everyone over to fiber.

 

Only ATT can make fiber worse than copper.



#716 OFFLINE   studechip

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Posted 05 June 2014 - 09:28 PM

The goal should be broader coverage, not so much better service to existing customers.

Shouldn't broader coverage always be a goal?



#717 OFFLINE   slice1900

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Posted 05 June 2014 - 09:29 PM

Bet that doesn't include areas served by Verizon - AKA, my area.

 

Obviously it would only include areas where AT&T is the telco. It won't do you any good in Verizon country, or me any good in Centurylink country.


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#718 OFFLINE   slice1900

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Posted 05 June 2014 - 09:38 PM

Shouldn't broader coverage always be a goal?

 

When the buyout of AT&T was announced, they committed to rolling out broadband to 15 million currently unserved customers in their region, using a combination of FTTH and FTTN technology. So they already had a "broader coverage" commitment, now they're committing to "better coverage" for (some of) those are who already served.

 

Whether this commitment is good depends on whether you're unserved and will be served, or are served and will be better served. For a lot of people, this will be great, for a lot of others they'll hope and pray and be disappointed - I'm sure as with other broadband rollouts and wireless rollouts, it will be impossible to learn in advance when or in some cases even if you'll be upgraded.

 

I remember the waiting game where I live for both 3G and LTE from AT&T wireless. The former was sorely needed since Edge sucks, the latter didn't really make any difference as far as I'm concerned because they gave us HSPA+ for 3G and as a result AT&T's 3G was (and still is) faster than the LTE Verizon rolled out around here. I was hoping it would help during football games, but having 125,000 people in an area about a half mile square still overwhelms the cellular network...


Edited by slice1900, 05 June 2014 - 09:40 PM.

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#719 OFFLINE   BrucePadgett

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Posted 06 June 2014 - 07:08 PM

Forgive me if this has already been noted earlier in this thread, but I noticed that U-verse is currently offering four channels DirecTV has yet to add: Funimation, BBC World News, NHK World, and CNN International (the first three in HD).

For this reason alone, I welcome the merger. Yeah, AT&T's prices are steep, but DirecTV is no bargain anymore. (Tried to get deals lately? Not so easy lately.)

I personally am really tired of waiting for additional programming. If it takes a merger to have more choices, well then, let's bring it on.

Edited by BrucePadgett, 06 June 2014 - 07:10 PM.


#720 OFFLINE   harsh

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Posted 07 June 2014 - 07:54 AM

I am wondering just how the acquisition would make it any easier to extend or complete fiber. Arguably, they'd have more money to do installations if they didn't buy DIRECTV®....

AT&T said early on that they expected the combination to be able to save 1.5B/year after the transition was complete.

Whether you believe the board is going to plow that money into upgrading service for existing customers or give the shareholders a big dividend is up to you.

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