While DIRECTV doesn’t help the telecom company compete in the online video space immediately, cost savings from the merger and the extra cash flow will improve its ability to compete with the cable giant that would be formed by Comcast Corp.’s proposed $45 billion takeover of Time Warner Cable.
With 5.7 million U-verse TV customers and 20.3 million DIRECTV customers in the U.S., the combined AT&T-DIRECTV would serve 26 million. That would make it the second-largest pay TV operator behind a combined Comcast-Time Warner Cable, which would serve 30 million under a $45 billion merger proposed in February.
AT&T is already the largest mobile service provider in the U.S., serving 116 million customers compared to Verizon’s 103 million.
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