DALLAS (AP) — AT&T Inc. on Sunday agreed to buy satellite TV provider DirecTV for $48.5 billion, a move that gives the telecommunications company a larger base of video subscribers and increases its ability to compete against rivals.
AT&T currently offers a high-speed Internet plan in a bundle with DirecTV television service. The acquisition would help it further reap the benefits of that alliance. AT&T could also use the deal to improve its Internet service by pushing its existing U-verse TV subscribers into DirecTV’s video-over-satellite service, freeing up bandwidth on its telecommunications network.
With 5.7 million U-verse TV customers and 20.3 million DirecTV customers in the U.S., the combined AT&T-DirecTV would serve 26 million. That would make it the second-largest pay TV operator behind a combined Comcast-Time Warner Cable, which would serve 30 million under a $45 billion merger proposed in February.
The deal could face tough scrutiny from the Federal Communications Commission and antitrust regulators at the Department of Justice.
Unlike Comcast Corp. and Time Warner Cable – which don’t compete in the same territory – AT&T’s U-verse, offered in 22 states (including Hawaii), competes directly for TV customers with DirecTV, which is available nationwide.