AT&T, due to its high debt load, has had trouble participating in the upcoming bidding for the C-band spectrum, FierceWireless reported, citing a MoffettNathanson report. One way the company is hoping to decrease that debt is by selling off assets.
AT&T, it’s been reported over the last few months, has been looking to offload DirecTV, the satellite service that’s been bleeding subscribers for the last several years, even beyond the modern-day standards of cord-cutting. DirecTV lost 900,000 subscribers in the first quarter of this year, and another 846,000 in the second quarter
Per Motley Fool, AT&T spent $67.1 billion on the merger, between buying the company and assuming its debt, even though DirecTV’s equity value at the time was only about $48.5 billion.
Reports on recent weeks stated that AT&T had launched an auction for DirecTV, with several private equity firms participating in the opening rounds of bidding, which had created the impression that DirecTV would fetch a fire sale price of less than $20 billion, much less than AT&T paid just four years ago.
Those reports also stated that Dish Network had not joined the bidding, at least at that stage, even though Dish’s CEO Charlie Ergen has stated more than once in the last year that he sees a combination between the two satellite companies as “inevitable.” Various scenarios have been proposed for how that could happen, include a complicated spinoff that would put DirecTV and Dish into one entity, with private equity firms also holding an ownership stake.
Now, a new report suggests such a merger may not be so inevitable after all.
The New York Post reported this week that the Department of Justice antitrust regulators have informed AT&T that any merger between DirecTV and Dish “would likely have to wait until faster 5G wireless service is more widely available in rural markets.” Concerns have been raised over whether a unified satellite TV company would cause prices to rise in areas of the country, including tribal lands, in which other forms of Internet access are not available.
There are hopes that the rollout of 5G technology will improve Internet availability in such parts of the country, although that it is not a problem that’s expected to be solved overnight.
The story added that after the long process of regulatory approval that held up AT&T’s acquisition of Time Warner for over a year, AT&T lacks the stomach for another long regulatory fight.
It’s unclear what stage the AT&T auction has reached, or how close it is to making any sort of deal.
Stephen Silver, a technology writer for The National Interest, is a journalist, essayist and film critic, who is also a contributor to Philly Voice, Philadelphia Weekly, the Jewish Telegraphic Agency, Living Life Fearless, Backstage magazine, Broad Street Review and Splice Today. The co-founder of the Philadelphia Film Critics Circle, Stephen lives in suburban Philadelphia with his wife and two sons. Follow him on Twitter at @StephenSilver.