Does AT&T Really Want DirecTV Instead Of Dish Network?

Possibly, but the smart money today is betting that AT&T would prefer Dish. DirecTV shares are up 5.5% in mid-day trading following a Wall Street Journal report that the telco giant initiated conversations about a deal that could be worth $40B. But Dish Network is up even more at 7.5%. “We scratch our heads” at AT&T’s motivation to team with DirecTV because the satellite company “does not have wireless spectrum,” Wells Fargo Securities’ Marci Ryvicker says. She suspects the approach to DirecTV is a way “to perhaps ‘flesh out’ [Dish Chairman Charlie Ergen] to pursue some sort of transaction with Dish.” Guggenheim Partners’ Paul Gallant also says that AT&T would prefer Dish, which has been amassing rights to spectrum in the hope of creating a wireless broadband business. AT&TThat could be important for AT&T because “it is not immediately obvious where new spectrum comes from after the FCC’s broadcast spectrum auction in 2015.”

Wunderlich Securities’ Matthew Harrigan believes an AT&T-DirecTV combo makes sense. AT&T’s U-verse has just 5.7M video customers. Teaming with DirecTV, with 20.1M U.S. subs, would “offer a premium demographic national video solution that supports first to market 4K TV capabilities while allowing AT&T’s U-verse plant to be entirely dedicated to broadband.” (Its systems now allocate 15 Mbps to video and 10 Mbps to Internet.) (more…)

This article was printed from https://deadline.com/2014/05/does-att-really-want-directv-instead-of-dish-network-722466/