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Could a DISH and DirecTV Merger Be On The Horizon?

Could a DISH and DirecTV Merger Be On The Horizon?

Dish Network and DirecTV are both companies in transformational phases. Dish has ambitions of becoming one of the major wireless carriers in the U.S., and DirecTV—which has been spun out from AT&T—now offers its pay-TV services via an Internet-based streaming model. That has led many industry insiders to speculate whether DirecTV and Dish are good candidates for a merger.

Dish Network and What the Future Holds

As of this writing, Dish Network still has 8.55 million satellite TV subscribers, but that number continues to trend downward. In fact, satellite TV as an industry is losing almost 12 percent of its customer base each year. Dish has other ambitions, though, and was pivotal to the FCC allowing T-Mobile and Sprint to merge. Conditions of the agreement require Dish to build a 5G network—via a partnership with Amazon Web Services—that can provide service to 70 percent of Americans by June 2023. The beta program for this network will kick off in September 2021 in Las Vegas and continue throughout the fourth quarter.

DirecTV and What the Future Holds

AT&T spun off DirecTV as its own business. While AT&T still has something around a 70 percent stake in the company, this independence is important on a number of fronts, including any regulatory approval that would allow DirecTV to merge with another company. Meanwhile, DirecTV is hard at work reimagining itself as more than just a satellite TV service. It has taking up a mantra that some have referred to as beam it or stream it. If you want to access DirecTV through traditional means, you can. But you will also be able to access it purely as a streaming service. The company will soon have its own Android TV-like device, or you can use its app via other devices, such as Roku and tablets.

Potential to Be the Largest Pay-TV Operator in the U.S.

DirecTV currently has 15.4 million subscribers. Were Dish and DirecTV to merge, the total consumer base would be approximately 24 million. That would make the new company that largest pay-TV provider in the U.S. This would be in addition to the 5G network and the ability to entice people with packages that could combine cellular, Internet and the most robust TV plans available.

AT&T and Dish Partnership May Be an Indicator

AT&T spinning out DirecTV was the precursor to much of the merger speculation. It seems to be the most obvious reason AT&T would want to do it. What is also interesting is the developing relationship between Dish and AT&T, which had one been contentious at best. A stipulation of the T-Mobile-Sprint merger approval was that T-Mobile sell certain companies to Dish, such as Boost Mobile, and provide it access to its network so that Dish could continue serving customers as it built its own network. But T-Mobile has been a bad actor since the agreement was put in place, and that problem was largely alleviated by a deal between Dish and AT&T that gives Dish access to the AT&T network. In fact, Dish is on record saying that it will actively minimize use of the T-Mobile network that it has available.

This Merger Is Not a Novel Idea

It is worth pointing out that this is not the first time there has been potential for a Dish and DirecTV merger. Both companies tried to consummate a merger approximately 20 years ago, but the FCC and DOJ blocked it because there simply was not enough competition to warrant it.

But the Environment Is Different Now

Much has changed since then, and much of what the FCC pointed to then, such as the maturation of broadband and the rise of 5G, has happened or is at least in the process of happening. Chairman of Dish Network—Charles Ergen—believes whether it happens now or in a decade, the merger is inevitable.

About the author

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Jitender Sharma

Founder of The Next Hint, Inc. and Publisher on Google News. Spent 25,000 hours in Business development and Content Creation. Expert in optimizing websites according to google updates and provide solution-based approach to rank websites on Internet. My aspirations are to help people build business while I'm also open to learning and imparting knowledge. Passionate about marketing and inspired to find new ways to create captivating content.
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