DirecTV Would Create Triple Play for 47% of U-verse Homes

Though there are several reasons AT&T wants to acquire DirecTV, ability to rapidly supply linear video is among the key drivers.

AT&T has about 57 million high speed access locations, but only 30 million (53 percent) can get linear video service. The fastest way to create a triple play bundle for nearly half its consumer locations is to bundle DirecTV with U-verse.

Beyond that, DirecTV will throw off massive amounts of free cash flow, which is helpful for a firm that pays out most of its earnings in the form of dividends.

Eventually, DirecTV also would give AT&T the ability to create a triple play bundle out of region, where it does not have U-verse facilities. In those situations, AT&T would bundle DirecTV with mobile-supplied voice, messaging and Internet access.
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