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AT&T proposes merger with DirecTV

AT&T, the second largest wireless provider, agrees to purchase DirecTV for $48.5 billion. Both groups reached a decision to merge last week. However, the final verdict rests in the hands of Congressional lawmakers. Being that this will be the fourth-largest partnership within the telecommunications industry noted in history. And, a few months prior, Comcast publicly announced its petition to acquire Time Warner Cable.

DirecTV was launched nearly 24 years ago offering a wide variety of satellite TV packages and audio services to consumers in the U.S., South America, and the Caribbean. It was once the second largest company in the market until recently. Last August, the company reported a significant loss in sales due largely to a decline in subscribers.

With the newer and more innovative trends in the market, DirecTV was apparently feeling the heat of competition from other cable companies. They appeased customers with more affordable bundle package deals. To date, DirecTV has a debt of $67 billion, on which AT&T plans to take.

Together, AT&T and DirecTV will have a stronger competitive niche in the industry. Consumers will have wider options from which they can choose: voice, TV, home security, wireless Internet, etc. As the companies aim to increase sales and annual revenues, AT&T will be able to invest in additional land-line networks, thus, enabling faster Internet connections. They plan to reach at least 15 million more homes.

AT&T CEO/Chairman Randall Stephenson believes this merger is a good move because it will enable premium content to be transferred beyond TV to various devices such as smartphone, tablets, and laptops. Consumers would have access at their hands whenever they desired.

Consumers can expect a few changes in the near future:

  • AT&T has committed to maintaining the current rates for cable over the next three years. However, once the three-year spectrum has ended, the rates will more than likely rise.
  • Subscribers will have access to additional channels and content, such as on-demand selections.
  • The companies plan to offer better quality and high-definition (HD) for its overall appearance.
  • Customers, who would like AT&T’s U-verse –a package comprised of digital television, Internet, and voice services, that are not offered in rural areas, will have the preference to purchase similar packages through DirecTV.

As for now, all services offered by the companies will continue uninterrupted. Many consumers are awaiting these new benefits, though, skeptical of the rate adjustments.

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