Telecom giant AT&T and its joint-venture partner TPG are reportedly in the early stages of discussions to merge their satellite TV service, DIRECTV, with Dish Network, owned by EchoStar, according to a report from Bloomberg. This potential merger, if successful, would create the largest pay-TV provider in the United States with an estimated 16 million subscribers.
The two companies previously attempted a merger in 2002, but the U.S. Justice Department blocked the deal due to antitrust concerns. However, the landscape of the pay-TV industry has changed significantly since then, with the rise of streaming services like Comcast, Charter, Amazon Prime, YouTube TV, and Netflix. This could potentially pave the way for the merger to clear regulatory hurdles this time around.
Both services are facing the very real issue of shutting down if they don’t find a way to change their future.
Dish has been increasingly losing money and subscribers. Dish needs to find a way to get more money to finish its build out of a 5G wireless network that is sees as the future of the company. Without that network, the future of Dish is very much in doubt.
DIRECTV is also facing a declining number of subscribers after a recent major fight with Disney that lasted almost three weeks. Its new deal could help but but its far from a way to instantly fix its issues.
In the end, both companies are facing the fact that high speed internet is becoming more widely available in more rural areas. With high speed wireless internet from 5G and satellites now offering high speed internet anywhere with a line of sight to the sky, many people have options they never had before.
Consequently, expensive satellite TV is no longer needed in the United States and satellite internet has seen millions of customers leave over the last few years with no end in sight.
A successful merger would bolster the combined company’s negotiating power with programmers. For Dish, the merger would allow them to focus their resources on expanding their 5G wireless network.