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The Transformational AT&T, DirecTV Merger

By Jeff Kagan
Aug 6, 2015 5:00 AM PT

AT&T's acquisition of DirecTV is more than a merger -- it is a transformational event that could change the entire television space. It has the potential to create such intense competition that it very well could transform the entire television space -- meaning cable TV, satellite TV and IPTV -- and blend it with wireless.

It means more choice and more innovation. Remember what AT&T did with Apple's iPhone a few short years ago? Those two companies' collaboration transformed the entire wireless industry. Previous leaders like BlackBerry and Nokia were crushed overnight as the new smartphone world was created.

The AT&T and DirecTV combo could have even greater potential. In the case of its partnership with Apple, AT&T lost its exclusive right to distribute the iPhone after a few years.

Cable television is at risk. It is a tired industry. It needs a refresh. It started losing market share a few years ago to new competitors like AT&T U-verse, Verizon FiOS and CenturyLink Prism.

However, those competitors' footprints are regional, not national. AT&T's merger with DirecTV gives it a national footprint. That's what makes this deal so good for customers, the marketplace and AT&T.

Cable television companies have started to modernize and to improve their relationships with their customers. Comcast has introduced Xfinity, for example.

Benefits of U-verse Now on DirecTV

For the last several years, I have been warning the cable television industry that this new wave was coming. However, it ignored the coming threat. It can ignore it no longer -- now that AT&T and DirecTV are one, the transformation has begun.

Just a week after the ink dried, DirecTV made its first announcement as part of AT&T. It is offering customers the opportunity to blend their DirecTV and AT&T Mobility wireless services. That means customers will be able to watch television at home on their TV, or out and about on their smartphone, tablet or computer.

DirecTV's offer expands the benefits of AT&T U-verse to a nationwide marketplace.

AT&T customers now have a choice. They can choose IPTV through U-verse or satellite service through DirecTV. They can also view their programming selections over the wireless network.

This is big news for DirecTV customers and those who like the idea, but not the limits. There are no more limits -- and this change is just the beginning. Based on what we know about the way AT&T operates, we can expect more.

The Transformation Is Under Way

That's what we have to look forward to, thanks to the AT&T, DirecTV merger. Having followed AT&T as an industry analyst for the last few decades, I fully expect it will continue to roll out new announcements and innovations, and transform the entire television space.

This is not only a growth opportunity for AT&T and innovation for television customers, but also a move that will turn up the heat in the entire competitive landscape. Perhaps we will see yesterday's leaders -- like Comcast, Time Warner Cable, Charter and Cox -- add fuel to the competitive fire. I hope so.

I don't want to see anyone fail. In fact, I want to see all competitors thrive. I think the AT&T, DirecTV deal is the transformational event that will change the entire industry. It could be just the kick in the butt all the other competitors need. We can only hope.

E-Commerce Times columnist Jeff Kagan is a wireless analyst, telecom analyst, industry analyst, consultant and speaker who has been sharing his colorful perspectives on the changing industry for 25 years. Email him at

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