AT&T recently revealed that the company would be buying DirecTV for $48.5 billion. It was announced both companies agreed to the deal, with AT&T purchasing DirecTV in a stock-and-cash transaction for $95 per share.
While DirecTV has exclusive rights to NFL Sunday Ticket, as well as minority stakes in the Game Show Network, MLB Network, NHL Network, and the Sundance Channel. It also has a foothold in Latin America, a region that offers major growth potential in pay television and mobile broadband. Which AT&T plans to continue nurturing.
In a press release announcing the billion dollar acquisition AT&T said DirecTV is "advantaged when compared with cable and telco in Latin America. Latin America has an under-penetrated pay TV market, about 40 percent of households subscribe to pay TV, and a growing middle class, and is DirecTV's fastest-growing customer segment."
DirecTV, which reportedly has 18 million subscribers in Central and South America, is the biggest pay TV provider in Latin America where the market for such a services is already growing at an amazing fast rate. The companies Latin American operation is definitely one of the company's greater assets, accounting for 95 percent of its subscriber growth.
Reinforcing the importance of Latin America and DirecTV, AT&T said it would separate with its $5 billion stake in Carlos Slim's America Movii to make sure the regulatory process goes as it should and confirms the satellite TV providers business in the region.
According to Reuters, "DirecTV owns about 93 percent of Sky Brasil, the largest satellite provider in the region's biggest economy. It has 41 percent of Sky Mexico, controlled by Mexico's Televisa and serving Mexico, Central America and the Dominican Republic."
The news site also says it owns 100 percent of PanAmericana, which offers satellite TV services under the DirecTV brand in countries like Venezuela, Argentina, Chile, Colombia and Puerto Rico.
While this is great for AT&T and the television side of things it is also a grand opportunity for the company to lay roots for further internet service in a new region. While in the U.S. the company provides TV service, in Latin America DirecTV has slowly ventured into the wireless broadband market. The company has airwave holdings that cover 43 million households across countries including Argentina, Brazil, Colombia and Peru. According to its website the company aims to provide Internet services to more than 5 million homes in those countries by the end of 2014.
As Reuters points out AT&T has extensive experience in acquiring and building wireless spectrum into cellular networks, and Latin America provides the company ample opportunities to further growth its Internet services.
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