From Motley Fool:
AT&T could use cash raised from selling DirecTV's assets to pay down its debt faster. The company refinanced $17 billion worth of debt in the second quarter, issuing new lower-interest long-term bonds and retiring near-term debt. AT&T ended the quarter with over $152 billion in net debt – an improvement from $162 billion at midyear 2019, but still a massive overhang on the business.
I’m not sure how AT&T can sell DTV right now. It’s the bulk of the video business. Infrastructure costs little, and there are still 15M subscribers paying for the overpriced service. The cost structure of existing and new services is why AT&T can’t win. Cable options are cheaper at this point. They still don’t have a significant footprint, and AT&T TV does not have all the channels due to DTV held content agreements that the satellite service has. It’s not a different product than the DYV Now-AT&T TV Now predecessors. The channels are still too limited. Ask the AT&TV reps how customer satisfaction is going. The cost structure has to be addressed for all services (cellular is crazy expensive in an ultra competitive market that is now pushing back more than ever on the market share AT&T has always enjoyed), and they need to make the deal with Amazon and Roku if they hope to give HBOMax any kind of fighting chance. But for now, even with the debt load (which is primarily Warner and not DTV), the money is coming in from DTV and mobility are keeping the company afloat.
1vyu+16aCEgeU , ATT TV does not require a fiber connection. It even works on the u-verse network.
AT&T recommends a "minimum of 8Mbps per stream for optimal viewing" with 25Mbps internet or more if streaming to three devices in the same home. It does not specify a 4K minimum speed, but says that "higher speeds are recommended."
Selling DTV would reduce debt and dead weight.
@1vyu+16aCEgeU said "Perhaps when (or if) T ever expands fiber into more of the nation - including NY and LA (which don't have significant fiber penetration) - selling DTV would make sense. But now it's just the fantasy of addled minds who clearly aren't really aware of reality."
You realize that T is not the ILEC in the NY market. It does have significant fiber penetration as VZ is aggressive in replacing their copper with fiber. T does not want to build in their own ILEC markets, why the heck would they encroach onto VZ territory?
Stick with DTV. You obviously have no clue when it comes to what T does in the copper/fiber/wireline world.
2030 ... just dangling the carrot for the next ten years.
Consider the reasons why T might not want to sell DTV just yet:
Taking all that into account, selling DTV would essentially mean T is getting out of the video business. Which is clearly not the case. And the reduction of debt load by eliminating DTV would backfire, as it is the main revenue stream for T's video segment.
So, selling it doesn't reduce debt; eliminates a steady and significant source of video revenue, and leaves T without a meaningful video service.
Perhaps when (or if) T ever expands fiber into more of the nation - including NY and LA (which don't have significant fiber penetration) - selling DTV would make sense. But now it's just the fantasy of addled minds who clearly aren't really aware of reality.
So, again, what logic is there in selling off DTV? They would get hardly any debt relief as
The 2030 plan is just a meaningless carrot to hang out there for employees and investors to set their sites on while Stinky fills his pockets and lets the company spiral out of control.
But no worries, HIS personal plan is to be gone long before the results of the 2030 BS are realized. RS did the same with his vision 2020.
The roll out of HBO Max has been described as a catastrophe during the Stankey's investor call, he alsotalked about the 2030 plan? does anyone know what is the plan?
T will sell DTV and buy the next big thing.....AM radio stations. They will use AM stations to promote T products like unlimited plans and overpriced streaming services to all 12 people listening.
DirectTV was a great buy. They should have bought SelectTV... though that was an 80s thing.
DTV is dead. Techs only install one thing. Legacy managers even the legacy executives are beyond incompetent and were laughed at by everyone at T. Look at the decisions DTV made and the garbage plans they tried to implement. No more song and dancing in garage meetings. No wonder they got taken over and spit out like a piece of trash.
they never needed direct tv. stupid buy. you can't buy growth
No one uses DirectTV except foreigners and soccerf–s.
Why not? Isn't that the typical AT&T protocol - buy a healthy business, turn it into a failed business, and then sell it for pennies on the dollar!
I'm sure Stanks is liking his greedy fat chops wondering what great, shiny thing to buy with all the money he will get from selling DTV.
Are you kidding me! They've only paid off $10B in debt? And they are re-financing debt? Stephenson said the spending binge would be paid off in a few years. What's going on?
Well, I'll tell you. Little to no organic growth.
Verizon and T-Mobile driving wireless prices down and taking customers away.
Over 60% of profit goes to dividend payments.
DTV business failing due to mismanagement. Think about that one for a minute. 25M customers when they purchased it, 18M now with an ARPU of $124. Do the math, it's staggering at how much money they are losing because they refuse to compete with the streaming companies.
Fiber footprint is too small and it's going to cost a fortune to build it out.
5G? Going to need a lot of fiber backhaul for the promised speeds. Better get ready to write some big checks.
My guess is that Stankey is history in 12 to 24 months when the financial picture is really really bad. T goes back to being a telco. DTV dies and Time Warner is sold for pennies on the dollar. T goes into Chapter 11 to re-org and get rid of the debt. The dividend disappears for a while to pay for the debt and everyone's 401k takes a hit.
Good fit for Dish!!
AT&T is mismanaged - Stankey is a fool and made a huge mistake acquiring DTV - they need to dump this losing business as soon as possible. every quarter they keep losing 1M subs... this is not sustainable. Stankey to save his Ar$$ said be bought DTV because of its customer base and not the satellite business - Guess what Genius arrogant mo–n: Customer base is fleeing as fast as they can. Stankey is a fraud.
DTV's operations are sold already. They are still working through a long term licensing agreement with the soon-to-be new owner before closing. Everyone in Dallas knows this. How can the Motley Fool bot?
Everything AT&T TOUCHES turns to_SHIIT.
In the end, everything and everyone Stinki touches turns to sh–…because he's not a builder, he's a destroyer. Sociopaths are like that, in that everything they do is geared toward their own self-aggrandizement. If they have to use and then cast aside people along the way…well, that's just the cost of doing business