Boston, MA 06/09/2014 (wallstreetpr) – AT&T Inc. (NYSE:T) on June 3, 2014 said that the company would be able to afford the fiber connection expansion in case it was allowed to buy DirecTV, the satellite broadcaster. The fiber connection expansion will enable AT&T to penetrate into more number of homes for boosting the Internet connection speed and broaden its subscriber base.
Response from Directv’s Board of Directors
DirecTV’s board of directors in May 2014 had agreed to sell the company to AT&T in a deal worth $48.5 billion. However, the deal still needs approval from the regulators. It comes under the federal policy goal to see raising speeds of the Internet and expand the broadband access. It is, therefore, observed that AT&T could manage to interest the regulators at Federal Communications Commission.
Benefit of the deal to AT&T
AT&T Inc. (NYSE:T) in a regulatory filing said that the deal would enable it to advance 2 million additional locations to the Gigapower fiber connections. At the same time, the deal would allow it to expand the high-speed broadband coverage to around 13 million locations.
In April 2014, AT&T announced that it was possible for the company to construct Gigapower in 25 cities in the local-phone operating territory of the company, but it was all up to the projections of demand as well as negotiations with the local authorities.
At the same time, the company said that the deal would help it in saving $1.6 billion on a yearly basis. Huge chunk of saving would be from lower costs for TV programming because the company would get huge discounts by combining its 5.7 million TV customers with 20.3 million TV customers of DirecTV.
At present,AT&T Inc. (NYSE:T) is a supplier of fixed broadband connections to nearly 16.5 million businesses and homes. As of now, AT&T as well as DirecTV were equally competing with the cable companies, which are capable of offering TV service and broadband. After combining with DirecTV, AT&T would be able to compete with these cable services in a much better manner.
