AT&T purchased DIRECTV as a way to further expand the services it offers. The company closed on the transaction, which was worth $49 billion in June of 2015 and the move was one that was seen as a big step for the company. The Federal Communications Commission approved of the deal, though AT&T did have to make change concessions to close the deal. What this move did was to make AT&T the largest paid television provider in the country. At the time of the transaction, it had some 26 million total subscribers, bringing 20 million of those in from DIRECTV and another 6 million from U-Verse, AT&T’s secondary service. What does the move mean for the company?
Why Did the Company Make the Move to Buy DIRECTV?
Of course, AT&T wanted to expand its services and to reach more audience members. Yet, there are many people looking at the underlying reason why this move took place and wondering why it was beneficial or even considered. There are a few things that this move brings.
- By merging the companies together, the company could now offer an additional service in a quadruple play. This would allow the company to offer four bundled services, often times with a significant drop in cost to the subscriber. This may include mobile, fixed line phone service along with offer TV service and high speed Internet.
- The move also helped the company to offer more in the way of content distribution space. In short, companies with a product to sell – whether a network like NFL or a simple product to sell – can now do so across the board, providing services across a wide range of services and products.
- The move also opened up additional markets to the company and provided some markets with improved access to the services the company has to offer. For example, the move allowed the company to better move into the Latin American market, making it possible to tap a larger number of customers.
All of these changes are already taking place. We are seeing AT&T offering more, streamlining the packages it offers to include more services, and the company is further reaching into a variety of markets throughout the country.
The company is likely to continue its expansion. With the move to purchase DIRECTV, AT&T no longer has to worry about the expense of expanding its U-Verse service and its fixed line connectivity because it can focus those services on satellite.
There is no doubt that the company will continue to innovate and expand. It is likely to offer new, faster speed Internet as more companies move in that direction. It is also working to expand the quality of its DIRECTV services and offering more programming that meets the specific needs of its customer base. There is no telling what the future may offer this growing and expanding company and the products that it is now offering. Take a look at its offerings now.