AT&T Rumored To Buy DirecTV

AT&T may be looking to get back into the traditional pay TV business in a big way -- with talks about it buying big satellite TV service DirecTV.

The deal would broach some $40 billion for DirecTV’s 20 million U.S. subscribers and 17 million customers in Latin America. The Wall Street Journal first reported on the possible agreement.

News of the deal sent DirecTV’s stock sharply higher -- nearly 6% higher to $81.78. Previously, DirecTV has said it would open to talks about it merging with satellite TV competitor Dish Network.

Dish’s midday stock price was up nearly 4% to $58.93. AT&T’s stock price was off 0.3% to $35.60. AT&T and DirecTV have an agreement through which the companies offer a co-branded version of DirecTV's satellite television service across the 22 states, where AT&T offers residential broadband and voice service.

For eight years now, AT&T has grown its own Internet delivered U-verse TV service, which now goes to some 5.7 million subscribers.

In 1999, AT&T purchased the assets of then-biggest U.S. cable TV operator Tele-Communications, which had some 13 million subscribers. The deal went for $43.5 billion. This business for AT&T’s cable operations, called AT&T Broadband, was then sold to Comcast in 2003.

In 2006, AT&T launched U-verse includes broadband Internet, IP telephone, and IPTV services.

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