Cable TV firms such as Comcast, Time Warner Cable and Charter have identified high speed broadband and video streaming as target growth areas, bringing them into direct competition with telecommunications companies. Comcast has already moved in a bid to reinforce market share; the FCC is currently reviewing a $45 billion bid for Time Warner (Comcast seek regulatory approval..). DirecTV shares climbed 4.07% in response to the WSJ’s report in Thursday trading, while AT&T shed 0.35% for the day. The development has also intensified speculation that Sprint will launch a bid for T-Mobile in an attempt to salvage its own share of the telecommunications market. Both firms traded well Thursday, gaining 2.71% and 8.06% respectively. Thursday’s stock movements in both DirecTV and T-Mobile indicate investors expect both firms to be compensated handsomely should potential mergers be agreed upon and sanctioned. Spread betters should monitor merger developments in the telecommunications industry particularly closely over the next few weeks. To set up a spread betting account and receive a bonus of up to £5000, visit InterTrader.
Joe Expert
AT&T and DirecTV in merger talks: WSJ
AT&T has approached satellite TV operator DirecTV about a possible merger, according to the Wall Street Journal. The paper reported that DirecTV would be “open to a deal” with the second largest mobile service provider in the US, but did not cite its source. Analysts suggest the potential acquisition would cost AT&T north of $40 billion, the current market capitalisation of DirecTV. Currently boasting 20 million customers, DirecTV is the second biggest pay TV operator in America. The proposed merger would see AT&T gain a stronghold in pay television, thus affording it the opportunity to develop bundled wireless and TV services. Telecom giants AT&T and Verizon have been increasingly directing focus towards broadband services in recent years; the traditional fixed telephone market is in sharp decline.
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