Score one for wireless service providers looking to consolidate with multimedia companies (or fellow mobile operators). United States District Court Judge Richard J. Leon has ruled in favor of national carrier AT&T in the US government’s antitrust suit to stop the proposed merger deal from happening between Time Warner and AT&T.
Just to give some bit of a background, it was in October of 2016 when AT&T had revealed that it was planning to acquire Time Warner for a total sum of $54.4 billion (and $108 billion with debt). The United States Department of Justice, however, was against the potential merger agreement, and back in November of last year, the DOJ had proceeded to file a lawsuit in order to block the merger.
According to the US agency, AT&T merging with Time Warner would almost certainly result to increased prices for customers (raising the average cable bill of American consumers by $0.45), and even possibly lead to unfair competition in the industry. Not surprisingly, AT&T was prepared to throw some equally compelling counter arguments. The way the number two mobile operator in the country saw it, shutting down its proposed merger with Time Warner would be catastrophic to its business. Furthermore, blocking the deal would only allow traditional cable TV services to continue to fall behind Internet based services (like Netflix and YouTube, for instance) in terms of innovation.
But with Judge Leon’s decision favoring AT&T, the carrier would now be put in a good position to shake up the world of multimedia, mainly due to the fact that a wireless giant is now hooking up with an entertainment media empire. It goes without saying that this mega merger will probably inspire other companies to try to do the same. Take Fox and Comcast, for instance -- the former of which already has agreed to sell its entertainment assets to Disney. It is not that surprising that Internet companies and traditional media are starting to join forces -- tech companies like Facebook and Google have grown so big that the rest of the world now have to team up in order to catch up.
As for AT&T, it deserves some credit for already sowing some seeds -- about three years ago, it had completed its acquisition of satellite TV brand DirecTV (for close to $49 billion). And now with its merger deal with Time Warner getting one step closer to becoming a reality, it just might offer Time Warner media content through its DirecTV Now service.
