AT&T Inc
This development surfaces as the telecom giant nears the expiration of an agreement that permits the sale of its stake in the pay-TV company.
Insiders revealed that AT&T is contemplating different options, including a dividend recapitalization, introducing a new investor, or potentially selling its stake by August 2024. However, these discussions are preliminary, Bloomberg reports.
AT&T and private equity firm TPG Inc co-own DirecTV, a partnership established in 2021, valuing the business at approximately $16 billion.
Like its counterparts in the pay-TV sector in the U.S., DirecTV faces stiff competition from streaming services, resulting in a declining subscriber base.
The company reported a loss of around 400,000 customers in Q2, tallying its total subscribers at 12.4 million, a significant drop from over 15 million in 2021.
The reduced subscriber numbers have impacted the revenue AT&T derives from DirecTV. In H1 2023, payments to AT&T from DirecTV plummeted to $1.9 billion, down from $2.7 billion the previous year.
This decline underscores the challenges faced by traditional pay-TV providers with the rising popularity of streaming platforms like Netflix Inc
AT&T's exploration of options for DirecTV aligns with its broader strategy to divest significant assets, marking a shift towards focusing on its core wireless and broadband services competencies.
In the joint venture with TPG, AT&T had garnered $7.6 billion for its DirecTV satellite and streaming service and its U-verse TV operations.
Furthermore, AT&T had previously considered merging DirecTV with Dish Network Corp's
Price Actions: T shares traded lower by 0.14% at $14.63 premarket on the last check Thursday.
