The venerable phone company with roots back to Alexander Graham Bell has to contend with slowing growth in wireless services, given that most Americans already have smartphones, and it faces new competitors for that business from cable companies. Comcast plans to launch a cellphone service for its customers next year.
Buying Time Warner may be “a good defensive move” against Comcast as the cable giant continues stretching into new businesses, New Street Research analyst Jonathan Chaplin said in a Friday note. Comcast bought movie studio DreamWorks Animation in August.
Several analysts say the AT&T deal will likely face opposition from Washington.
John Bergmayer of the public-interest group Public Knowledge, which often criticizes media consolidation, warned of harm to consumers.
For example, he said AT&T might refuse to carry channels that could compete with Time Warner’s networks. Or on its phones, AT&T could let wireless customers watch TV and movies from Time Warner without using their data, in turn disfavoring video from other providers.
If the deal is approved, regulatory conditions could limit AT&T’s ability to favor Time Warner video or give AT&T customers better deals. It would be one of the largest media mergers since Time Warner’s disastrous sale to AOL in 2000.
Time Warner, meanwhile, has moved to counter the threat that sliding cable subscriptions poses to its business. Among other things, it launched a streaming version of HBO for cord-cutters and, alongside an investment in internet TV provider Hulu, added its networks to Hulu’s live-TV service that’s expected next year.
Before reports last week of a possible deal with AT&T, Time Warner’s stock had risen 23 percent this year, outpacing the Standard & Poor’s 500.
Editor’s Note:
Story by the Associated Press; curated by Chris Enloe
Article Appeared @http://www.theblaze.com/stories/2016/10/22/att-reportedly-wants-to-buy-time-warner-in-an-80-billion-mega-deal/