rrrr I wouldn't say 'ever'. Maybe Stephenson wakes up and smells the coffee before it's too late. DTV deal fails and they properly position for converging communications over bundled fiber/fiber hybrid ISP position OR they pursue a global position which would include a movement to grab global white label status for mobile banking/virtual wallet. Fully agree DTV could be the nail in this stock for a long slog which it may never recover from in the future. Still a large network worth value but it took Time Warner a long, long time to recover from AOL disaster of a moat.
Cash flow is the key when it comes to debt. Debt is relative if you have enough cash flow to make the payments and reinvest in future growth. Cash flow comes under heavy pressure with falling margins/profits (as is happening with AT&T) and a bad DTV purchase. When you don't have cash flow to support needed capex investments to remain relevant in you market and support that juicy dividend payment then so goes your share price. If you have assets which no longer produce sufficient cash flow then what happens to the value of those assets?
Anything is possible in this market but what are the odds of T coming back for all of AMX after it just sold its ~9% stake in AMX (and that was after a 2% reduction in the past year)??? Fat chance. AT&T interest in the modest amount of assets AMX wants to sell off to get under the antitrust benchmark is possible but, IMO, AT&T is going to be tapping out its discretionary cash flow with DTV purchase. AT&T needs to be cash flow flush to make an effort with capex in 1 gbps ISP market deployment as G.fast comes to market. DTV is a step in wrong direction.
Share buybacks have been masking the problem by reducing share count and buoying the price. Discretionary cash begins to disappear with rising competition and DTV deal. ...just when capex will be badly needed to deploy G.fast and defend position as an ISP. ISPs will have the advantage bundler position as web transmitter, talk transmitter, and video TV programming bundler.
The problems don't really begin until the day ink is pushed on DTV closing. Nothing official until T actually takes the wrong turn in Albuquerque. Stephenson is a [urine] poor map reader and should be replaced. DTV=AOL rerun Mark it.
On the mark Tokuu. The death knell isn't here until NFL Sunday Ticket is renewed (meeting a condition of the deal) and the merger makes it past antitrust regulators. The day the paper is inked for DTV is when a short might begin to ponder a move. Discretionary resource drain is well stated.
Disclosure: no position in AT&T whatsoever and no intention of initiating anytime in the near future.
If they get DTV bought then it is all but guaranteed margin stress. Ergen's Dish Network introducing a web based bundle with acknowledgement the long term migration is to streaming video. Given pricing structure for the likes of Google TV, Amazon Fire or ala carte Netflix, Hulu et al you won't get to jab people for $120-140/month when you can get a similar package added for $50 with your 1 gbps ISP bundler. We also have richest man in the world, Carlos Slim, renouncing rights to purchase a satellite asset in Dish Mexico but will pursue a TV license. When Slim finally gets his TV license it will be ran over last leg copper of AMX using G.fast technology. There's your sign. Stephenson is going to run AT&T into the ditch.
DTV is $68B dilution to shareholders. Already have U-verse and there is no reason to purchase satellites in orbit when the long term trend is to streaming. DTV revenues migrating to streaming outside of T's PARTS of 21 states of wired line will be a complete loss of revenue/profits to other ISPs. The Okie takes a wrong turn at Albuquerque. Shareholders should be rolling heads.
LOL Nice wit early in the morning. They all refuse to discuss fundamental future of pay TV market. IP TV is going to hammer satellite TV. DTV/AT&T is an AOL/Time Warner rerun. It took the market a couple years to recognize the poor moat for AOL as well. Stephenson driving AT&T into the technology boonies with DTV deal. Cash flow will be hammered at the very time they will need it to deploy new technology to grab the 1 gbps ISP market in its PARTS of 21 states.
The transition is long term bad. A portion of customers were paying the fee without timely trade ups for new models. Long term is a negative but short term looks good on paper.
Record low churn because they had to drop their price to defend their customer base.
Uverse is a good long term asset and will continue to grow if they properly fund capex to expand fiber footprint/fiber hybrids coming to market. This supports my thesis of trend to IP TV as well. DTV moat is drying up with 1 gbps networks being deployed and Stephenson is going to waste $68B on what will be an AOL investment.
There is an Okie who must have been on a bender for a few days with shareholder money who bought a lame horse about to die. The horses name is DTV. The Okie has history of being drunk with shareholder money when he lost $6B, 4B of it in the finite spectrum that was handed over.
Technology change can kill competitive moats in short order. Buggy whip makers were a sure thing for hundreds of years and then somebody mass produced the internal combustion engine and the rest is history. Things change and fiber/fiber hybrids are going to change the communications landscape. DTV is a turn in the wrong direction.
Nope but a bean counter Okie is going to squander it away. All of the profits for DTV resides in the states. The 1 gbps ISPs coming across the States are the ones who will be upsetting the DTV/T apple cart.
Now that would blow some minds. Lots of last leg copper owned by Frontier could be used for 20% of full fiber cost to deploy 1 gbps. Thinking Frontier is pretty low market cap but holds an intriguing copper position which could be leveraged immensely using G.fast coming to market. Need to do some homework.
Uninformed again. 20 Billion in debt to be assumed from DTV balance sheet. Not to mention a bunch of new dividend expense for the shares to be issue to buy DTV. Wouldn't be bad if DTV was a growth asset but it's not. DTV subscriber numbers flat lined. Take a note my friend. Land line revenue moving up with Uverse. DTV is an AOL rerun and T will not be able to recapture all the defection for IP based TV. What it does recapture will be much thinner margins as moat is gone.
Given copper incumbents get the spoils I might look closer at Frontier since they have been grabbing copper from VZ and AT&T. That would be a better gamble than DTV.
You do realize with DTV comes additional dividend expense with the stock being issued and additional debt service on the $20B debt assumption? Additional obligations on growth P/E multiple purchase price when satellite TV revenues are fading in the profitable U.S. market. When wheels start falling off satellite video revenues and profits it will cause additional strain on T's cash flow. What happens to the share price when they can't support the dividend payout as satellite craters. DTV is a reason for worry tsjdiet. T is in trouble if DTV gets NFL Sunday Ticket deal done and the merger gets past anititrust regulators.
With DTV poised to spend $68B (includes the debt to be assumed of 20B), your dividend will come under pressure going forward. Satellite TV is dead money as the competitive moat evaporates with IP TV.
Confirms my point the race is for 1 gbps connections. Notice their pricing on the video is $70 spot? Same as GOOG Fiber in Kansas City. Believe Grande Communications in Austin is $65 area. GOOG TV bundle add on for another $50....who needs DTV subscriptions for $120 (and no internet)?
Agree with Coolin. The courts and FCC are about maintaining sufficient competition, BUT telecom lobbyists are about protectionism for a monopoly and buy politicians who make laws. If the public utility company wants to dip the toe at comparable market prices in fiber then there isn't any reason the courts should block it. Been trying to tell everyone fiber is the future and it will carry TV within it. DTV is dead money and G.fast is going to press the issue with 1 gbps deployment. AT&T headed in the wrong direction. Time to boot the CEO with poor strategic vision.