AT & T Case Study Of At & T

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AT&T closed the deal and bought DirecTV for about $49 billion in July this year. This merger will make AT&T the country’s largest pay TV provider, with more than 26 million subscribers. Why did AT&T agree to pay this whopping price to acquire DirecTV? The answer to this question lies in the problem AT&T was facing with the rising competition from other wireless companies and losing money to cable companies providing phone services. With the fast growing streaming and wireless technologies, more and more cable and satellite service providers want to control content and delivery. Hence, this merger would bring more options to AT&T to provide to their customers, which would bring them more revenue. Almost every household today has Internet…show more content…
But with DirecTV, AT&T would not only be a nation wide TV player, but will also have access to Latin America. With all of DirecTV’s customers and new bundles providing more services, AT&T will increase its revenue and will have more to pay its stakeholders. Another problem AT&T was facing at the time was the lack of premium content on its TV service. With increasing demand of premium content on TV, AT&T customers would start to look into different services that provide it. With DirecTV, which is way ahead of AT&T in terms of content licensing, after the deal, AT&T would be able to get way better bargaining leverage for getting good content. But are all these benefits worth $49 billion? Could AT&T have invested lesser money and developed their own TV service like DirecTV, or even better? Why was buying DirecTV a better idea than adding services to it’s existing bundles or merging with a cable company? AT&T already had high quality TV and Internet service in the U-Verse whose market was growing at a decent rate. AT&T could have invested its resources to develop its U-Verse rather than acquiring DirecTV. Then why did AT&T decide to buy DirecTV? Since allocation of resources is the most important aspect of making a decision, this was a very important big decision for AT&T, which could cost them billions of…show more content…
NFL Sunday Ticket, which is one of the most unique features of DirecTV, would now be in the hands of AT&T. No other TV service provides sports programing as much as DirecTV; why it is so famous amongst sports fans. With this and a wide selection of channels, DirecTV attracts a lot of customers, which would now be an advantage of AT&T. The Federal Communications Commission (FCC) did approve the merger of AT&T and DirecTV, but the merger companies will have to abide by certain criteria. AT&T will have to comply with net neutrality, and it will have to break down their bundle in order to make it more affordable for the low-income customers. AT&T would also have to disclose all its interconnection agreements and report its performance to make it easy for FCC to monitor. Incorporating these regulations bring many changes to both the companies in both management and technical aspects. Because this was a huge decision for AT&T and DirecTV, it would also affect its employees. A merger or an acquisition can lead to many employees losing their jobs on both sides. This could also lead to employees quitting looking for other opportunities before they get laid off. Also, with new regulations and management system, the organizational culture would change and adjusting to it could be challenging to many employees. All this leads to increase in stress level for the employees and also the

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