AT&T has decided to sell its remaining part of DirecTV to private equity firm TPG for $7.6 billion.
This is a significant step for AT&T, which bought DirecTV over ten years ago for $48.5 billion, hoping to gain more TV subscribers and compete better in the market.
AT&T Seeks to Focus on 5G
However, many people have been canceling their cable and satellite TV services, switching instead to streaming platforms like Netflix. In 2021, AT&T had already sold 30% of DirecTV to TPG in a deal worth $16.2 billion after losing millions of customers.
AT&T now says the full sale will allow it to focus on providing wireless 5G and fiber internet services. The sale is expected to be completed by the second half of 2025, but the deadline could be extended if needed, according to CBS News.
On the same day, DirecTV announced it was purchasing Dish TV and Sling TV from EchoStar. As part of the deal, DirecTV will assume $9.8 billion of EchoStar's debt while paying just $1 for the transaction.
The deal is important for DirecTV, as it aims to stay competitive against the rising dominance of streaming services.
For years, there has been talk of a possible merger between DirecTV and Dish. Over 20 years ago, the two companies almost merged, but the US government blocked the deal due to concerns over reduced competition.
Now, with more people using streaming services and fewer customers subscribing to satellite TV, regulators might be more open to allowing this merger.
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DirecTV and Dish Aim to Recover Lost Customers
Both DirecTV and Dish have been losing a significant number of customers. Since 2016, they have seen 63% of their satellite TV subscribers leave for streaming services. With this deal, DirecTV hopes to offer more affordable TV packages to attract customers back.
Bill Morrow, the CEO of DirecTV, believes this merger will improve their ability to work with content providers and offer customers more of what they want to watch. He also hopes the combined company will be able to operate more efficiently and provide more value to its customers in a market where streaming services are the dominant players.
The deal is also seen as crucial for EchoStar, the company behind Dish TV, as it faces financial challenges. EchoStar has been losing money and currently has only $521 million in cash left.
EchoStar also faces $1.98 billion in debt due by November, and it expects to continue losing money through the rest of the year, according to KHOU 11.
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