AT&T reportedly courting DirecTV for possible acquisition

Tie-up of landline giant and No. 2 satellite provider would challenge Comcast-Time Warner Cable combination amid a changing TV climate.

Dozens of people lined up early Tuesday morning in front of this AT&T store to get the new iPhone 4. The store was sold out of the phones by 7:30 a.m., a half hour after it opened.
Maggie Reardon/CNET

AT&T has raised the possibility of a merger with DirecTV, according to the Wall Street Journal, the latest indication of the changing landscape of the TV industry.

The tie-up of the telephone giant and satellite TV provider would challenge the combination of Comcast and Time Warner Cable if that proposed $45 billion merger is completed, the newspaper noted. The deal would likely be worth more than $40 billion, DirecTV's current market capitalization.

The landline giant approached the No. 2 satellite TV provider since Comcast announced its deal with Time Warner Cable in February, the Journal reported, citing sources. The combination of DirecTV's 20 million subscribers with AT&T's 5.7 million customers would slightly trail the 30 million subscriber base created by Comcast's proposed acquisition of Time Warner.

DirecTV declined to comment. CNET also contacted AT&T for comment and will update this report when we learn more.

Telecoms have been trying hard to compete with cable companies by, likewise, offering bundled services with television, broadband, wireless, and home phone. A merger with DirecTV would provide a greater national footprint in TV for AT&T, which already partners with DirecTV to offer TV service in areas where its U-Verse TV service is unavailable.

This isn't the first time AT&T has been linked to rumors of a satellite TV acquisition. After the demise of AT&T's $39 billion deal to acquire T-Mobile in 2011, there was speculation that AT&T would go after Dish Network. AT&T, which has been looking for a way to get into the television business on a national scale, was reportedly also interested in the satellite company's swath of compatible wireless spectrum -- the same frequency of that AT&T is using to build out its 4G LTE network.

 

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