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Which Telecom Giants Will Merge Next?
WSJ once again rekindles AT&T/DirecTV merger rumor....
The Wall Street Journal thinks consolidation will soon be back in vogue, especially after Comcast's recent legal victory against the FCC-imposed 30% TV viewer ownership cap. Without really any sourcing, the company throws out a slew of possible mergers and acquisitions, suggesting that Comcast could show eventual interest in Time Warner Cable and Verizon could buy Dish Network. The paper also trots out one of the oldest acquisition rumors in telecom history, AT&T's supposed interest in acquiring DirecTV:
quote:
If AT&T buys DirecTV, for instance, which could occur in just a few months given a pending reorganization of DirecTV's ownership, the resulting company would have at least 20 million TV subscribers and a national marketing power that cable operators can only dream of. One reason AT&T may be prompted to move soon is that buying DirecTV would mean it could reduce investment in its land-line TV service, U-Verse. That would allow it to invest more in adding capacity to its wireless phone network -- which is becoming overburdened with heavy iPhone users.
Of course the last thing AT&T needs is to further skimp on their terrestrial network investment -- their decision to milk copper with VDSL already has the telco struggling to keep pace with faster cable DOCSIS 3.0 offerings. The Journal cites antitrust lawyers who don't think the current regulatory climate will prevent additional mergers, particularly if the carriers don't directly compete. What's your vote for the next big telecom deal?
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Talis
join:2001-06-21
Houston, TX

1 recommendation

Talis

Member

AT&T Buys US Government

Oh wait, done deal.

Z80
1 point 77
Premium Member
join:2009-08-31
Amerika

Z80

Premium Member

Re: AT&T Buys US Government

Actually it is the government that has been in the hostile takeover business lately.

CylonRed
MVM
join:2000-07-06
Bloom County

CylonRed

MVM

Re: AT&T Buys US Government

They were not hostile when both companies knew it was that or death...

Z80
1 point 77
Premium Member
join:2009-08-31
Amerika

Z80

Premium Member

Re: AT&T Buys US Government

Tell that to the banks forced to take TARP money (and gov't control that came with it) and then were refused when they wanted to pay it back.

CylonRed
MVM
join:2000-07-06
Bloom County
·Metronet

CylonRed

MVM

Re: AT&T Buys US Government

I believe -
a) it was their choice to take it - or fail altogether - they chose the more prudent path (for once) for their jobs and the business. Forced would mean the had it forced on them even if they did not want the money. Don't know of a financial institution that had the money forced on them even thought they actively refused it. They gladly took it because they lobbied for it....

2) more than one bank/financial instiution has paid or started to pay the money back - off hand I don't know of any that were told not to take it back if they could without possibly causing more problems for the company.
»thewayforward.jpmorganch ··· tarp.htm
»www.thestreet.com/story/ ··· eek.html
»www.nakedcapitalism.com/ ··· rms.html
Any site I can find about the administration 'refusing' to accept money have been - less than one sided it seems to me...

Z80
1 point 77
Premium Member
join:2009-08-31
Amerika

4 edits

Z80

Premium Member

Re: AT&T Buys US Government

It was take it - or - take it with Bush's Paulson.

"We don't believe it is tenable to opt out because doing so would leave you vulnerable and exposed. If a capital infusion is not appealing, you should be aware that your regulator will require it in any circumstance. And then the amounts in billions the banks were forced to take were just 'penciled in' to the agreements without much thought (as evidenced by the GS amount changing, again in pen from $20B to $10B on a whim). It is disgusting. The agreements are Dear A$ letters, enter bank name "here", enter amount of taxpayer money they will get "here". And that evening the CEOs were expected to call their boards telling them they were participating. It real-world Godfather fashion, Paulson made them an offer they could not refuse.

»video.foxbusiness.com/50 ··· f7342f02

Copies of the docs referenced in the video item
»www.businessinsider.com/ ··· h-2009-5

Some were forced, whether they actually needed/wanted it or not and then under Geithner some were stonewalled when they wanted to pay it back.
»online.wsj.com/article/S ··· 163.html

»video.foxbusiness.com/50 ··· f7342f02

huju
@comcast.net

huju to Talis

Anon

to Talis
Bought and paid for. Now you can't take them to court for spying on you. Next the government will arrest you for saying something bad about them. What a country. Best government money can buy.

en102
Canadian, eh?
join:2001-01-26
Valencia, CA

1 edit

en102

Member

Rural subs getting the shaft (again) by AT&T?

Doubt it would happen.
Uverse vs. DTV inhouse would be a bad deal, especially if AT&T decided to stop deploying Uverse.

It would be the following:

Urban: Uverse tv + Uverse VoIP + Internet + 3G wireless

Rural: POTS + ADSL/Satellite + 2G Wireless

The only benefit to being rural would be Football/Hockey packages on DTV.

I think if ANYTHING, it will be Comcast + Clear/Sprint as one company.

T-Mobile + NTT DoCoMo as a new wireless.
Samsonian
join:2007-06-15

Samsonian

Member

Re: Rural subs getting the shaft (again) by AT&T?

said by en102:

I think if ANYTHING, it will be Comcast + Clear/Sprint as one company.

I posted on this sometime ago, and I concur on Comcast eventually taking over Sprint and Clearwire. Wireless is too important to Comcast for it to be MVNO'd long term, it needs to be brought in-house.

Sprint clearly has problems in the short term, but there are some clear advantages to a tie up in the long term. It allows both to better compete against AT&T and Verizon, and provide more competition in the market to the big 2 carriers on both the wired and wireless side.

For Sprint/Clearwire:
A return to fixed lines
Local access fiber (at cost fiber backhaul from towers)
Residential / Small-Medium Business
Financial resources

For Comcast:
National Wireless Network (~50 million customers)
Big Enterprise / Government customers (a who's who list of big, high value customers)
SprintLink Tier 1 backbone (at cost bandwidth, although bandwidth is cheap)
Global Presence

On the wired side, now that the cable ownership cap has been struck down again, Comcast will eventually be able to merge/acquire Time Warner Cable (TWC) among other cablecos.

As long as strong merger conditions are required and strictly enforced by the FCC, competition should actually increase. For example:

TV:
Reasonable and non-discriminatory (RAND) pricing on Comcast-owned networks (G4, VS, etc.)
Reasonable carriage of other networks

Internet:
Permanent elimination of data transfer cap
Agreeing to Network Neutrality principles
More liberal/open internet peering policy (already the largest ISP)
No lobbying against muni's

Those are just simple examples off the top of my head, there would need to be more and more detailed ones than that obviously. But the point is: a bigger Comcast could be a good thing.
T-Mobile + NTT DoCoMo as a new wireless.

I've been thinking about something like this as well. While T-Mobile USA is still going through healthy growth, it's still in a distant 4th place. AT&T and VZW are deeply entrenched, holding about 60% of the wireless market. That's a very difficult nut to crack.

DT/T-Mobile should consider selling a minority stake in T-Mobile USA to another foreign operator(s). Potential candidates include FT/Orange, Telefonica/O2, TeliaSonera, NTT DoCoMo, etc., maybe even Vodafone (despite it owning ~40% of VZW; although I think VZ would like to get Vodafone in the long term).

The potential billions raised from that could be used to fund a more rapid national build out, buy more spectrum, buy more regional GSM operators, etc.
Samsonian

Samsonian to en102

Member

to en102
I was also thinking about Satcos.

Like you, it doesn't make sense for either AT&T or Verizon to buy either DTV or ETV. Partnerships with either will work just fine in the meantime for areas without TelcoTV.

It does make sense to me that DTV and ETV merge to better compete against cable. They tried before, but the government rejected it outright and would challenge it in court, so they dropped the bid. It seemed very foolish and short sided to me, especially considering they haven't seen a telco merger they didn't like.

If it went through, it would have had over 20 million subscribers, or about 90% of sat TV market, but only 20% of overall pay TV market.

The latter isn't much too much of a concern, Comcast is almost at 30%, and rules can be created to mitigate the effect (i.e. reasonable carriage, etc.) if it is a problem.

The former is trickier, if sat was the only option available to you, you'd only have one real option left. But, I think merger conditions could handle this as well. Basically they could be prohibited from engaging in price/promo discrimination based on where you get service. It would cost more to hook up more rural customers, but they'd get the same pricing as urban/suburban customers. There could be minimum customer service requirements for rural areas, and other various conditions to protect those customers.

Basically it would create more competition between cablecos and satcos; by letting the satcos increase scale, reduce redundancies, and focus on competing with cable and not with each other, without hurting sat customers who have no other choices. Deploying 2 separate satellite network systems to serve the same market is ridiculously expensive and dumb.
nonymous (banned)
join:2003-09-08
Glendale, AZ

nonymous (banned)

Member

I wonder if anyone cares about Qwest.

Or if everyone will just keep picking up and merging with anyone and anything until only Qwest is left and someone gets stuck with it?

en102
Canadian, eh?
join:2001-01-26
Valencia, CA

en102

Member

Re: I wonder if anyone cares about Qwest.

Maybe a merge of the mega rural Telcos (sort of like what Alltel did to Wireless). The only difference here, is that Wireless is worth something, wireline is begin cast off as a red headed stepchild.

Qwest + Frontier + Fairpoint = mega rural corp... to go bust.
iansltx
join:2007-02-19
Austin, TX

iansltx to nonymous

Member

to nonymous
I'll wager that Qwest gets bought by Verizon, with the rural markets spun of to Windstream or CenturyLink. Frontier has bitten off more than it can chew, so that potential suitor is now unavailable.
EPS4
join:2008-02-13
Hingham, MA

EPS4

Member

Re: I wonder if anyone cares about Qwest.

If they were planning on that, you'd think they would have kept some of their Washington/Oregon area markets, at least the ones that have FiOS.
iansltx
join:2007-02-19
Austin, TX

iansltx

Member

Re: I wonder if anyone cares about Qwest.

There are a few big Qwest markets that aren't in WA/OR. Denver and Phoenix are two big ones.
Corydon
Cultivant son jardin
Premium Member
join:2008-02-18
Denver, CO

Corydon

Premium Member

Re: I wonder if anyone cares about Qwest.

Minneapolis-St. Paul is another.
iansltx
join:2007-02-19
Austin, TX

iansltx

Member

Re: I wonder if anyone cares about Qwest.

Ah right. The testbed for all of Comcast's new stuff.
patcat88
join:2002-04-05
Jamaica, NY

patcat88 to iansltx

Member

to iansltx
said by iansltx:

I'll wager that Qwest gets bought by Verizon, with the rural markets spun of to Windstream or CenturyLink.
The exchanges of a state can not be split. Either you sell the whole state, or not. The exchanges by the state shell corp ILEC can not be removed from the shell ILEC corp, they are a permanent package forever, until legislators and the FCC pass some new laws (not happening anytime soon).
viperlmw
Premium Member
join:2005-01-25

viperlmw

Premium Member

Re: I wonder if anyone cares about Qwest.

said by patcat88:

said by iansltx:

I'll wager that Qwest gets bought by Verizon, with the rural markets spun of to Windstream or CenturyLink.
The exchanges of a state can not be split. Either you sell the whole state, or not. The exchanges by the state shell corp ILEC can not be removed from the shell ILEC corp, they are a permanent package forever, until legislators and the FCC pass some new laws (not happening anytime soon).
Some documentation regarding this might be of use. In 2000, then US West had a deal in place for then Citizens Communications to buy rural exchanges in 13 states, the exception being Utah (the Utah PSC forbade this, and required US West to allow all ILECs in the state to bid on the exchanges. I worked for an ILEC at the time, we ended up with 3 exchanges). The Citizens/US West sale ended up going belly up, but the exchanges in Utah did sell. »psc.utah.gov/utilities/t ··· 65ro.htm
EPS4
join:2008-02-13
Hingham, MA

EPS4 to patcat88

Member

to patcat88
Are you sure about this? Verizon broke up the territory of the New England Telephone & Telegraph Company. (Yes, it was on state lines, but there was a single shell ILEC)
patcat88
join:2002-04-05
Jamaica, NY

patcat88

Member

Re: I wonder if anyone cares about Qwest.

said by EPS4:

Are you sure about this? Verizon broke up the territory of the New England Telephone & Telegraph Company. (Yes, it was on state lines, but there was a single shell ILEC)
Your right, VZ NE Inc covers/ed multiple states, but I guess VZ NE is registered with each state individually/its license is issued per state, so they can split off a part of a shell corp, but only if its an entire state.

FFH5
Premium Member
join:2002-03-03
Tavistock NJ

FFH5

Premium Member

Link to full WSJ story

»www.google.com/url?q=htt ··· 039.html
chsteiger
Premium Member
join:2003-10-03
Pasadena, TX

chsteiger

Premium Member

So they can put money into their wireless network?

Those nasty iPhone users, they are destroying everything!
ISurfTooMuch
join:2007-04-23
Tuscaloosa, AL

ISurfTooMuch

Member

Verizon and DISH

Ain't gonna happen. Charlie Ergen has had many chances to sell out, and he hasn't done it yet. As long as he runs the company, he's going to keep it to himself.

zoom314
join:2005-11-21
Yermo, CA

zoom314

Member

Re: Verizon and DISH

said by ISurfTooMuch:

Ain't gonna happen. Charlie Ergen has had many chances to sell out, and he hasn't done it yet. As long as he runs the company, he's going to keep it to himself.
Good! As Verizon would probably rename the service Verizon Satellite , Yuck...

Go Ergen!

FFH5
Premium Member
join:2002-03-03
Tavistock NJ

FFH5

Premium Member

Comcast & Charter & then TWC later

Comcast sucks up Charter 1st and then TWC later. Even then Comcast would have less than half the TVs in the country.
iansltx
join:2007-02-19
Austin, TX

iansltx

Member

Re: Comcast & Charter & then TWC later

I'm thinking the same thing. I'll bet Cox stays independent though, as do a lot of smaller cable providers. Any rural areas that Comcast buys from Charter and doesn't want go to Suddenlink or Windjammer.

elphracko7
join:2003-01-19
Springfield, MA

elphracko7

Member

Re: Comcast & Charter & then TWC later

I see Comcast taking TWC first. Charter is in the process of a bail out and back in the black. TWC would be an easier integration for comcast and less new cable to pull to make everything gel
iansltx
join:2007-02-19
Austin, TX

iansltx

Member

Re: Comcast & Charter & then TWC later

But if CC gets Charter for pennies on the dollar...
Samsonian
join:2007-06-15

Samsonian

Member

Re: Comcast & Charter & then TWC later

I think we're all in agreement that Comcast will eventually get TWC, Charter, et al.

I don't think Comcast can get Charter for pennies on the dollar though.

Charter is going through the bankruptcy process, and with it comes drama. This time is more acute because the plan submitted by Charter in the debt-for-equity swap seems ridiculously biased towards Paul Allen.

Despite this, Charter will likely emerge from Chapter 11 Reorganization successfully eventually. It's not likely that it will go into Chapter 7 Liquidation, where Comcast/TWC can swoop in.

The debt holders know that Charter is more valuable alive (to be sold later at a higher price) rather than picked apart in a liquidation auction. So no major debt holder is pushing for that.

Charter grew by buying out many smaller cable systems, and used debt to finance it. Charter would actually be profitable if its debt load weren't so high. Servicing that debt pushes them into the red (8% of industry customers, 20% of industry debt).

Not that carrying debt is a bad thing per se, indeed it's a necessity in this business. But it's a thin line.
Joe12345678
join:2003-07-22
Des Plaines, IL

Joe12345678

Member

U-verse 2 HD + 2 SD max is no where near what Direct tv can

U-verse 2 HD + 2 SD max is no where near what Direct tv can do.
33358088 (banned)
join:2008-09-23

33358088 (banned)

Member

why dont these people(ISPS)

just all merge into one ISP called

I.S.U.C

Internet Service U Can'tuse
jjeffeory
jjeffeory
join:2002-12-04
Bloomington, IN

jjeffeory

Member

Yuk

This would make DirecTV way too expensive.

U-Verse has been on the good side of okay, but it's too expensive for what you get, especially on the TV side. The GUI is pretty, though... The picture quality isn't the best...

I thought DirecTVs picture quality was a bit better than at&ts.

Meh, this shouldn't happen. It would be ok for dish and direcTV to merge, but not be bought by at&t or anyone else...
SuperWISP
join:2007-04-17
Laramie, WY

SuperWISP

Member

Watch for someone to try acquiring Level3.

The commenters here are barking up the wrong tree. Watch out for AT&T or Verizon to try to acquire Level3's nationwide fiber network. Even though this would cause very, very unhealthy market concentration in the backbone bandwidth market.

••••••••••
33358088 (banned)
join:2008-09-23

33358088 (banned)

Member

then you can get capped and UUB'd to death

just like Canada that is after all what is happened up here.
beaups
join:2003-08-11
Hilliard, OH

1 recommendation

beaups

Member

Typical

For WSJ and BBR...if there's no news, make something up.
Heated Man
join:2009-06-18
Cleveland, OH

Heated Man

Member

Re: Typical

Exactly
jfd15
join:2008-01-07
West Sacramento, CA

jfd15

Member

they are all

crooks....

elphracko7
join:2003-01-19
Springfield, MA

elphracko7

Member

AT&T Bigger and badder

AT&T up the wireless network and just buy T-mobile already. Wireless issue would go away almost overnight. And yes Buying Direct TV is an option but it could very well turn into a AOL/Time Warner regret for them also.
ISurfTooMuch
join:2007-04-23
Tuscaloosa, AL

ISurfTooMuch

Member

Re: AT&T Bigger and badder

I don't see that happening. First, AT&T doesn't gain much new territory by getting them, since there's a huge overlap in service areas. Second, more spectrum isn't what AT&T needs in most areas. Where they've been skimping is backhaul capacity. And even in the case of getting more bandwidth, pushing customers toward 3G would help with that, since it's more spectrum-efficient than GSM. Third, getting T-Mobile is only good spectrum-wise if AT&T factors in their AWS holdings, and taking advantage of those requires phones that support AWS. Finally, you're assuming DT wants to sell, which is by no means a sure thing. Oh, and there's the issue of federal approval, and that got a bit harder last January. I can't see the feds allowing one national carrier taking over another right now.
chelpt
join:2008-05-24
La Crosse, WI

chelpt

Member

New Centurylink, when done merging - look US CELL

I'm not sure how much people would think this is probable. But one day, I was looking at my coverage maps from US Cellular and the new Centurylink maps.

»www.uscc.com/uscellular/ ··· map_home
»www.centurytelembarqmerg ··· dex.html

The people at Centurylink are people that like buying up companies. And with the pace of integration that is already in place with Centurytel-Embarq... I don't think it will be long before they are ready for a new one. I think 'very long' is a term of about 3 years (+- 1 year). AND the core network to the new Centurylink will become a competitor to other data carriers for national bound data connections.

That could make the connections for an integration with US Cell an interesting one. And it would be one to compete with those of Verizon/ATT by enticing the more rural customers. It could be that the first shot was fired to that end when CTL ended their current agreements for cell coverages that used US Cell's towers as resellers of their service. And Legacy Embarq ended their cell agreements/services as well (I'm not sure if they used US CELL as a reseller or not).

Maybe they are just looking at getting a better deal for cell phone services because there will be a new native wireless system starting late next year.
JasonBourne
join:2000-05-22
Kansas City, MO

JasonBourne

Member

Re: New Centurylink, when done merging - look US CELL

Legacy Embarq was reselling Sprint service. I believe that agreement is over by Oct. 31st.
nthach
join:2009-02-11

nthach

Member

Verizon/Comcast...

Shoot, didn't Comcast want to buy out Verizon, after all the two are synergistic for each other...

FFH5
Premium Member
join:2002-03-03
Tavistock NJ

FFH5

Premium Member

T-Mobile owner DT may buy Sprint & merge them

»www.telegraph.co.uk/fina ··· int.html
Deutsche Telekom has called in banking advisers to study a possible multi-billion dollar bid for Sprint Nextel, the third-largest mobile phone operator in the US.

Sources said Deutsche Telekom (DT) could submit a bid for Sprint, which has a market valuation of $10.6bn (£6.3bn), within the next few weeks.

Combined, T-Mobile, the fourth-placed operator, and Sprint, the third biggest player, would closely challenge AT&T's second-place spot with 78.2m customers.

DT has been investing $1bn a year in improving its US network, but will need to spend far more to integrate Sprint, which runs on a different type of network. However, it could be easier to integrate the networks when they are upgraded to fourth generation status.

It is thought DT will also consider copying its approach to
T-Mobile UK by merging its US operation with Sprint.
Deutche Telekom, who already owns T-Mobile is thinking of buying Sprint. Would this mean a merger of T-Mobile and Sprint in the US?

This would put a combined Sprint/T-Mobile on an even footing with AT&T & Verizon Wireless.