The rumbling that AT&T Inc. is considering a purchase of a
satellite TV provider comes on the heels of rival Verizon Communications'
announcement that it has signed up over 500,000 subscribers for its nascent
cable killer FiOS. PaidContent notes that at current growth rates for FiOS TV,
as early as next year, Verizon will become the ninth-largest pay-TV provider
in the country, and by comparison AT&T's Uverse TV service with only
126,000 current subscribers won't even rank in the top 10 anytime soon. While
an acquisition of either DirectTV Group Inc. or EchoStar Communications Corp.
would make AT&T more competitive with cable giants Comcast Corp. and Time
Warner Inc. as well as longtime rival Verizon, which also is offering FiOS in
select AT&T local markets, it is an expensive bet on older technology,
when compared to Verizon's $18 billion investment in fiber optics. A satellite
purchase, on the other hand, will cost AT&T twice as much at $30 billion
to $40 billion, but leave the company stuck with slower DSL for broadband
packages and no on-demand TV content, making a satellite purchase seem like
one of the bad moves of the old AT&T. — Matthew
Wurtzel
See
earlier AT&T post from Dealscape
See
Verizon story from paidContent
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