BellSouth and AT&T Close Deal
Federal regulators approved AT&T's $85.8 billion acquisition of BellSouth. This is the largest telecommunications merger in history. Since you can read about the merger in every publication, I'll look at only one thing: how big a television provider might they become.
AT&T's local-phone network will traverse 22 states and stretch from Miami to San Francisco and include the Great Lakes region. The combined company has 58 million cell phone customers, 67.5 million phone lines and 11.5 million broadband users. This is the footprint the company has to eventually sell its IPTV service known as U-verse.
Wall Street hopes that AT&T will end up providing 20% of these homes with television services. If the company is successful, that means more than 13 million IPTV customers. This would make them the 3rd largest MSO (multiple system operator) after Comcast and Time Warner.
I know others that believe a 30% penetration is realistic. After all, 10% is often achieved in Verizon communities where their service is introduced with no marketing effort. This would mean over 20 million households and if each averaged a $50 per month bill, likely paying $1 billion per month in gross revenue to AT&T!
None of this is going to happen imminently and it will take a while to get the service up and running everywhere. Also, the service has yet to be marketed. But the most interesting experiment is that of scale: no IPTV test has ever been proven on a huge deployment like this.
Posted by admin on January 1st, 2007 :: Filed under IPTV
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