AT&T’s DirecTV and Dish Network reportedly entered fresh talks to merge their pay-TV businesses, reigniting the possibility of a tie-up after an attempt to do so was quashed by regulators nearly two decades ago.
Sources told The New York Post there is optimism a tie-up between Dish Network and DirecTV could now get through regulatory scrutiny as concerns about the duo’s market power in the satellite-TV space has reduced.
Both companies have lost customers over the past five years: DirecTV now counts more than 15 million customers compared with 25 million in 2017, while Dish Network’s figure declined from 13 million to 8.4 million.
The report suggested a merger between the two could also help boost US 5G rollouts following opposition from the Federal Aviation Administration regarding the use of C-band spectrumwhich forced AT&T and Verizon to delay their launches.
A merger with Dish Network could help AT&T free up funds to further finance its 5G rollout.
The Federal Communications Commission and Department of Justice’s competition unit shot down an attempted merger between Dish Network and DirecTV in 2002, The New York Post reported, adding government officials also warned against a possible deal in 2020.
However, the prospect has been raised once again, with TPG Capital pushing the issue. The private equity company paid AT&T $1.8 billion in February 2021 for a 30 per cent stake in a new company set up to house DirecTV, AT&T TV and its U-verse video service, and sources claim it now wants its investment back.
With both companies haemorrhaging customers, a merger is expected to result in around $1 billion cost savings, sources added.
Dish Network chairman Charlie Ergen previously conceded a deal between his company and DirecTV is inevitable.