As expected, AT&T late last week closed its US$48.5 billion acquisition of DirecTV, after receiving clearance from the Federal Communications Commission (FCC).
The merger, originally agreed in May 2014, gives AT&T a U.S. TV customer base of 26 million – the largest in the country – as well as 19 million in Latin America, including the Caribbean and Mexico.
That last market is of particular significance to AT&T because it recently spent billions of dollars on local mobile operators Iusacell and Nextel in order to create a single service area covering the U.S. and Mexico.
The integration of the AT&T and DirecTV will take place over the coming months. In the weeks ahead, AT&T said it plans to launch new bundles of TV, mobile and Internet services.
"Combining DirecTV with AT&T is all about giving customers more choices for great video entertainment integrated with mobile and high-speed Internet service," said AT&T Randall Stephenson, in a statement on Friday.
AT&T’s DirecTV operation will be led by John Stankey, CEO of AT&T’s entertainment and Internet services division; Stankey will report to Stephenson. DirecTV chief executive Mike White has opted to retire.
"Mike is one of the world’s top CEOs and a great leader who built DirecTV into a premier TV and video entertainment company," said Stephenson. "He has been a terrific partner and friend, and his legacy will be an important part of our combined company."
The deal was subject to a protracted review by the Department of Justice (DoJ) and the FCC, which were concerned about the merger’s impact on competition in the TV market, where the companies’ operations overlap.
The DoJ and FCC cleared the deal on Tuesday and Friday respectively.
In a bid to protect competition, the FCC imposed a number of conditions on the deal.
AT&T has agreed to extend fibre-to-the-home (FTTH) coverage to a further 12.5 million premises and submit all interconnection agreements to the FCC. The telco will also be prevented from excluding affiliated online video services and content from data caps on its broadband tariffs.
AT&T will also be required to offer gigabit broadband to schools within its FTTH footprint that qualify for the FCC’s E-rate programme, which seeks to extend affordable Internet services to schools and libraries.
