AT&T may be on verge of buying DirecTV for $50 billion
DENVER — AT&T may is reportedly in talks to buy the wireless operator DirecTV, which calls Colorado home to one of its three corporate hubs, for $50 billion.
The pending sale was being reported by a number of media outlets Tuesday, including the Wall Street Journal and Reuters. A sale could be finalized in the next two weeks if not sooner, according to the Journal.
If a deal is finalized, it may be the first of many telecom, cable and satellite TV megadeals that come to fruition in the near future. Comcast, another corporation with a major hub in Colorado, has reportedly proposed a $45 billion takeover of Time Warner Cable.
If both sales were to go through, it would make AT&T and Comcast similar-sized competitors in the pay-TV market.
According to Reuters, most believe rises in web-based TV and mobile Internet usage is at the heart of all these deals, especially considering subscriber growth has slowed sharply in recent quarters for DirecTV.
Unlike Comcast and other competitors, DirecTV has struggled to offset those loses by selling Internet subscriptions, due to technological constraints that prevent the company from offering comparable Internet speeds. Combining forces with AT&T could provide a way out of that dilemma.
Additionally, the Wall Street Journal is reporting that the acquisition of DirecTV makes sense for AT&T, considering the company is beginning to view video — whether via pay TV service or delivered over the Web or its wireless network — as central to its future.
Such an agreement between AT&T and DirecTV would likely come as sour news for Dish Network Corp., yet another satellite TV giant with a hub in Colorado. The company had sought to merge with DirecTV, but Dish chariman Charlie Ergen admitted last week that he would not be able to outbid AT&T.