business. It also owns TV networks like CNN
and TBS along with the Warner Bros. movie
studio in addition to its huge wireless and
internet business.
AT&T said the deal will strengthen its balance
sheet and let it focus on the expensive task
of upgrading its wireless network with next-
generation 5G technology. That update requires
expensive investments in radio spectrum — it
just spent $23.4 billion for bandwidth in the
latest U.S. government auction — and AT&T also
plans to plow more resources into fiber-optic
internet infrastructure and HBO Max.
AT&T will use the deal proceeds to pay
down debt.
The new DirecTV company will include AT&T TV, a
streaming version of cable TV, and U-verse, AT&T’s
older cable service. AT&T will retain its Latin
America DirecTV business. AT&T said it expects
“few to no changes” for subscribers. The deal is
expected to close in the second half of the year.
“It’s fair to say that some aspects of the (DirecTV)
transaction have not played out as we had
planned, such as pay TV households in the U.S.
declining at a faster pace across the industry
than anticipated,” AT&T wrote.
U.S. and Canadian subscribers to cable or
satellite television services dropped by 27
million between 2010 and 2020, and fell by 6
million in 2020 alone, said Digital TV Research.
A burst of new streaming services have recently
emerged to compete with Netflix, including
HBO Max, Disney+ and NBCUniversal’s Peacock.
AT&T’s video business has lost 6.7 million
customers over the past two years, and claimed
17.2 million subscribers at the end of 2020.