Department of Justice antitrust officials have told AT&T executives that a merger between its DirecTV and rival satellite TV provider Dish Network will likely need to wait until 5G wireless service is more widely available in rural regions of the U.S., according to New York Post sources.
As when the prospect of a merger arose two years ago, the regulators remain concerned that a merger could lead to price increases in rural communities that lack access to high-speed internet.
Dish Network co-founder and Chairman Charlie Ergen has continued to describe the merger as “inevitable,” given the continuing drop in pay-TV subscribers.
But AT&T, which has been selling off “non-core” assets to finance an accelerated push into streaming, has been widely reported to be shopping DirecTV around — and getting low-ball offers.
AT&T acquired DirecTV for $48.5 billion in 2015, and had hoped to sell it for about $20 billion, but has reportedly been receiving initial bids from private-equity firms in the area of about $16 billion.
While the widespread arrival of 5G in rural America would likely make it easier to get government approval of a DirecTV-Dish merger, it would also likely reduce Dish’s service dominance in those areas, making a merger more difficult to finance, as MoffettNathason pointed out in a recent research note.