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AT&T's $50 billion interest in DirecTV is just one part of an ambitious expansion

Matt Hamblen | May 15, 2014
AT&T's apparent interest in DirecTV is only the latest move by the wireless carrier to expand into just about every wired and wireless market it can.

Combining AT&T and DirecTV would create a pay TV company close in size to Comcast-Time Warner.

AT&T and DirecTV officials declined to comment on reports of a deal in the works.

The carrier's strategic thinking is primarily about AT&T "looking over its shoulder at the competition, which includes Verizon but also Comcast with Time Warner and Google branching out," said Jack Gold, an analyst at J. Gold Associates. "It's a play to keep consumers funding AT&T rather than others...to consolidate services in the expanding market of connectivity to home, office, cars and more. "

AT&T has to be ambitious to survive, added Rob Enderle, an analyst at Enderle Group. "Companies have to invest in the future or they'll go under," he said.

Patrick Moorhead, an analyst at Moor Insights & Strategy, said AT&T's moves are clearly intended to "gear up for battle with Google and Verizon. To successfully compete, all the players have to scale up in buying content, installed seats and bandwidth and AT&T's rumored acquisition of DirecTV would provide all three."

In recent years, AT&T "had its hands full just keeping up with the iPhone and smartphone growth and now that the growth is slowing, AT&T has to look to other areas...," said independent analyst Jeff Kagan.

"I think this is just the new world" in networking, Kagan said. "We had better buckle our seatbelts and tune in to other industries, because AT&T and other companies are going to be expanding into other industries, one after another."

 

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