Purchase of DirecTV To Make AT&T Major Player in Video

In a move to become a major player on the video front, AT&T is spending $48.5 billion for DirecTV, a satellite TV provider that delivers video on any device. Combined with AT&T's broadband network that covers 70 million customer locations, the blockbuster acquisition would create a powerhouse in mobility, video and broadband services.

Consider the breadth of the merged company, which hints at a converged future. If the deal is approved by federal regulators, AT&T will become a content distribution leader across mobile, video and broadband platforms. The scale will position AT&T to meet customer viewing demands today and in the future, spanning traditional pay TV, on-demand video services delivered over broadband, or a combination of the two. Expect a massive shake up in AT&T bundles when the deal closes.

"This is a unique opportunity that will redefine the video entertainment industry and create a company able to offer new bundles and deliver content to consumers across multiple screens: mobile devices, TVs, laptops, cars and even airplanes," said Randall Stephenson, AT&T chairman and CEO. "At the same time, it creates immediate and long-term value for our shareholders."

Forward-Thinking Merger

As Stephenson sees it, DirecTV was AT&T's best option because it is a premier brand in pay TV with strong content relationships and a fast-growing Latin American business. He's convinced the merged company can drive innovation and offer more competitive choices for customers. Mike White, president and CEO of DirecTV, agreed.

"U.S. consumers will have access to a more competitive bundle; shareholders will benefit from the enhanced value of the combined company; and employees will have the advantage of being part of a stronger, more competitive company, well positioned to meet the evolving video and broadband needs of the 21st century marketplace," White said.

One differentiator DirecTV brings to AT&T's table is live sports programming. It has...

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