I consider the rumor to be a joke as there is little motive for T to purchase DTV. They publicly bagged on VOD's cable asset acquisition (although those were all about buying top of the market fiber networks). I see little reason for T to buy a satellite sector which has reached a flat growth trajectory. Any good insights from T faithful for the logical tie up? I'm all ears but see much greater growth potential in not only communications but banking/money transfer biz in a VOD acquisition.
If you don't know what I'm talking about with banking/money transfer then you should familiarize yourself with M-Pesa and SmartPass apps being launched throughout VOD's markets. M-Pesa initially started in Kenya of all places and has trickled into other African markets has JUST completed India wide launch in India market. M-Pesa in partnership with Safaricom. Then, when you look at SmartPass, one should find VISA has partnered in launching SmartPass (an EU version of M-Pesa) beginning late last year in Europe. There is a staggered launch underway for SmartPass in EU. Some have speculated M-Pesa may eventually be folded in with SmartPass.
Then go search for an article by "El-Erian bitcoin". If you miss the one important sentence then the whole article is confusing jibberish to many people. "Its [bitcoin] impact, both actual and potential, is relatively limited when compared to ongoing attempts to enhance and democratize lending, borrowing, investing, and payments and settlements." Maybe he is talking about mobile financial apps called M-Pesa/SmartPass that would be brought across the pond with a T purchase of VOD? Maybe I'm smoking something but it wouldn't hurt for message board readers to do some reading up on the broad swath the banking/financial apps are covering and think about the impact such a deal would have with a global tie up.
Sentiment & disclosure:Long VOD and will be long whatever merged company is created IF T cuts a deal.
More stories out today. I think you're absolutly correct on satellite sector being flat.
This mornings L.A. Times article was interesting. It may make some sense from AT&T's standpoint if their U-verse isn't getting any 'bang for the buck,' and any other reasons they may have to look real deep for ?
Freeing up their highspeed U-verse spectrum & taking on satellite TV programming, on the surface seems a wash, and it may be.
But what few bits & pieces I know, with the F.C.C. (aka Politicians) pushing "broadband" for the entire country, it may be inevitable, and possibly wise for AT&T to take a hard look at taking on Direct TV while that market is flat ?
Obviously AT&T focusing on high population areas is more profitable and 'Standard Operating Proceedure", but could it be the F.C.C.'s handwriting is on the wall ?
I really don't have a clue. It seens the more I read, the more confused I get. This could get real interesting ?
Any new thoughts on this, or wait for further news ?
We have already seen the push back on the spectrum auction plans. The biggest point to me is the rumor being pushed is a deal would be AT the current market cap. If there is any weight to a deal then you STILL see some dilution to existing T shareholders if the T P/E ratio stays the same.
FCC had a program going with gov't funding matches for rural carriers to deploy high speed fiber but some who weren't awarded funding (exhausted funds) sued and put the deep six on continued fiber deployment in many rural areas. Little reason for T to want DTV as it could actually cannibalize some U-verse service. The only possible gain is maybe some disgruntled Dish Network customers might move to DTV with internet service becoming available through DTV. Dish Network already provides broadband to serve those rural markets. It would be back to who provides a cheaper bundle and customer service. This is why I see little to be gained by T. There is little reason to pay little more than a 10-12X P/E for a company with little perceived growth opportunity. T would be paying more than their own P/E so you see dilution.
DTV makes absolutely no sense and I wonder a little if it is more public strategy play to get VOD to come to the table for negotiations. VOD has to invite T to the table during the six month restriction period. That restriction doesn't expire until late June. If you want top dollar to sell your firm do you invite the wolf in or keep the door locked and let them huff and puff? Colao sitting in a brick house but the door automatically unlocks in less than two months. Item to ponder is why he / board chose to shed VZ shares from VZ Wireless sale = antitrust poison pill.
U-verse will get bang for the buck as fiber network is built. Once they have a product which leaves cable ISPs in the dust you will see a migration. Right now my U-verse speeds are horrible. (Considered cable ISP myself but just haven't bothered to pull the plug and go to cable.)
very informative, thank you. expanding a global presence is most likely best next move. partnering with just anyone for the sake of growth wouldn't be good. but vod does look good. do you see any other good candidates?
Bottom line is the consolidation of the U.S. market is pretty much done. When you have regulators getting panties in a wad over a TMUS/S tie up then the growth is obviously organic inside the U.S. market or you have to leave the borders. Organic growth remaining is pretty much FiOS/data just as Stephenson has indicated. Given U-verse combination is already available with DTV, I would venture to say any significant organic growth is limited in DTV market gains. That is why I asked if I was missing something when I started this comment string. Maybe T will just let DTV fold into T for absolutely no premium but I see little incentive for T to be approaching DTV versus a VOD merger.
Study VOD you would quickly realize the instant global growth available in a merger with VOD. VOD is VERY well positioned for organic growth for a very long time. VZ Wireless ownership being stripped out of VOD with the VZ shares being given to VOD shareholders removed the antitrust issue for U.S. regulators if T makes a move.
As far as other global targets....VOD is hands down the very best target given its global footprint. Telefonica would have been a decent go as it would have given T a strong Latin America and an EU market position. TEF was reportedly approached by T and was rebuffed by Spanish government leaving the only obvious choice to be VOD. DTEGY is just an okay market position but carries the antitrust issue with being TMUS parent. The primary item one should consider for a target outside the borders is what T and VZ (market leaders) are doing here and who is doing similar positioning in markets outside the U.S. The only scale player chasing FiOS assets with success outside the U.S. is none other than VOD. The big asterisk to VOD is they are in the forefront of mobil bank/finance service and their product will be fully deployed its markets in the near future. Seen nothing of the like for killer financial app positioning by either of the big U.S. telecoms.
Curiously, but not too 'up' on this technology other than interest, and being a stockholder ? ... and reading some interesting discussions on 'rural signals' discussed earlier on this board - my sis & brother in law (rural) having same the problems.
How would this DTV & AT&T situation apply ? I've mentioned to them (sis & family), in my rural travels, that I've seen roadside signs advertising (rural) High Speed Broadband Internet (via satellite), yet their wireless carrier (AT&T ?) does not offer this. But someone does ?
I just got off of wiki, trying to get a better understanding of this broadband technology. I noted several mentions of this being the F.C.C.'s goal for the (rural) U.S.
Being a holder of AT&T and VZ stock but I've never given this a thought till now.
Seems that owning 'satellite' might be an opportunity ? Do these 2 top telecoms not want some of this gigantic (?) rural mkt, or is it more complicated than this ? Any corrections are welcomed (thx)
VZ offers this but it would create more problems than advantages for T to purchase DTV. High Speed cost issues being worked out with fiber. There is less profit in the rural market because of a pure numbers play. I wouldn't call it a gigantic market unless you are discussing the geographical footprint of that market.
There is a reason for many government programs/FCC. A top reason is a lack of profits in the rural markets vs. capex spending in better technology for populated areas so they run programs to push investment into those less or no profit areas. The growth in profits isn't there for a $40B acquisition if rural broadband is the only reason for T acquiring DTV. FiOS is the growth play and T's money would be better served elsewhere. Would be hypocritical of them to buy DTV after comments about VOD's cable and fiber acquisitions. Cable can be spun off.....
SIM cards and TSM provider. I would have to agree Gemalto may be a 500Kg Gorilla nobody is paying attention to in the USA. USA still a little behind the eight ball on mobile payment workings but there will be a day.... Nice play. Interesting the big short interest in it currently while on GS's conviction buy list. Already serving a joint deal with T, TMUS and VZ. Jointly is the point. GTOMY is a key player in the mobile banking/financial services space.
I will be putting on a watch list going forward. In the U.S. it is an OTC ADR with limited volume trade.
Do you have any other insight? Great reference. Many thx Tampico.