This is not a good time to be a satellite TV provider.
Dish Network lost 194,000 subscribers in the fourth quarter of 2019, according to media research firm Moffett Nathanson and AT&T-owned DirectView, which lost 945,000 members in its premium services.
DISH grew from approximately 13.27 million satellite subscribers in 2015 to just 9.4 million in 2019. DIRECTV fell between 19.78 million and 16.8 million customers in 2015 (when AT&T acquired the company) and 2019.
Considering those numbers, it has been rumored for some time that DISH and DIRECTV could merge, and it can now set the stage for this to happen.
AT&T withdrew from satellite TV?
It depends on who you ask.
AT&T purchased DIRECTV in 2015 for $ 48.5 billion. It is already offering subscription TV under the brand name “U-Kavitha”. The following year, it launched more than one top streaming service, DIRECTV Now (renamed AT&T TV Now), and some employees began to worry that it was the company’s future.
It doesn’t help that now it costs mo 35 / mo, satellite users are paying north of mo 100 / mo. For a single product.
AT&T spent $ 85 billion to buy Time-Warner in 2018, designed to bring more content home.
After the DIRECTV T-16 satellite was launched into orbit in June 2019, AT&T said it would have the last company. This is not surprising; President and Chief Executive Randall Stephenson will support Satellite TV in late 2018, “We’re Working One Way.”
Or are they? In September 2019, John Stankey, CEO of AT&T’s WarnerMedia Division, told the Wall Street Journal: “DIRECTV is an important part of what we do next.” And heir to Stanken Stephenson, he has committed to staying only this year.
One of DIRECTV’s biggest voices for breaking AT&T is activist shareholder Elliott Management. Elliott issued a statement saying, “The industry, especially the satellite, continues to suffer a sharp decline when it comes to fighting AT & T’s premium TV subscribers.” Unfortunately, it became clear that AT&T had bought DIRECTV at the absolute peak of the linear TV market. “After negotiations, Elliott pledged not to make another major acquisition from AT&T last October, but the company also does not want to sell to DIRECTV.
Dish also wants to enter the wireless business
The dish, based in the suburbs of Denver, CO, was helmed by friendly CEO Charlie Ergan. He is not in the cage about what he believes will be satellite TV.
“The growth in TV is probably inevitable because of the absence of linear satellite TV providers coming from giant programmers and trillion-dollar companies,” he said in a February revenue call. Wisdom. “
But there is another element in the game:
The federal government has agreed to a merger of wireless carriers T-Mobile and Sprint (as evidenced by Ergon), which means Sprint will have to cut its non-contracted wireless service boost mobile, which it says will buy Ergon. So far, this step has not happened yet.
Dish is about to hit the March 2020 deadline imposed by FCC, which has begun using a large block of wireless spectrum purchased in an attempt to become a 5G wireless provider, but is not ready to go. The FCC extended that deadline to June 2023 on a 2018 complaint filed by T-Mobile that Dish intends to maintain the warehouse spectrum to no avail. Ergen said the company is only preparing to step into 5G: “We are not collecting spectrum. We have accumulated enough spectrum to compete with industry legends. “
Dish must make its 5G service available to at least 70% of U.S. residents by June 2023 or pay a fine of $ 2.2 billion.
The benefits of the deal are clear, allowing AT&T to grow into the world’s fourth largest wireless carrier as it continues to gain a foothold in its satellite-delivery service and expand its 5G wireless network into the US.
In 2002, the two companies proposed a merger, but this was rejected by federal regulators, who refused to watch Satellite TV, a monopoly control.
The landscape has changed a lot since then. Craig Moffett of Moffett Nathanson wrote, “Satellite TV grew so fast at the time. It is now in freefall. It alone is enough to settle the debate; certainly, one is better than the other, but both are reliable bankruptcy risks. Don’t have.
With that reality on the horizon, the merger of the two companies could be one, as Ergon said.
Such a company is truly a monopoly, so consumers have to rely on the risk of cable TV becoming more vulnerable to subscription rates.