At first glance, AT&T’s big-ticket buyout of DirecTV doesn’t seem to promise much change for business and enterprise customers. Even though AT&T has a huge number of business customers, the immediate effects of the country’s biggest telecom buying its largest satellite TV provider will mostly fall on pay TV subscribers, not wired or wireless telecom users. And since pay TV is used by relatively few businesses, there doesn’t seem like much potential for disruption.
Perhaps the biggest benefit, such as it is, would be the ability for AT&T’s wireless customers to watch DirecTV video on their phones and tablet. Nice, but hardly a game-changer for business customers.
But a closer look reveals a variety of possible repercussions from the deal.
1. AT&T will have more income. DirecTV’s relatively mature business throws off some $8 billion in cash every year, money that AT&T could choose to spend on upgrading its broadband and wireless networks, or to buy wireless spectrum. The merger could theoretically create efficiencies and lower costs, but it’s unlikely that would lead to lower prices for enterprise customers.
2. AT&T could be distracted. Closing a big deal like this could take AT&T’s eye off the business broadband ball, instead concentrating on figuring out the large and relatively unfamiliar consumer media business it’s paying so much scratch to enter.
3. Regulatory concerns could affect AT&T. To appease anti-trust officials, AT&T is making several promises, including a plan to bring high-speed Internet services to more rural communities and to respect net neutrality by not hampering "the delivery of Internet content on its network for three years," according to the New York Times. While limited and temporary, those promises could have real effects. And that’s only the beginning. Who knows what AT&T might have to do to get the FCC, the FTC, and the Justice Department to go along with this major industry consolidation.
4. It could stress the FCC. The FCC is responsible for approving key aspects of the deal, and also has to cope with the Comcast-Time Warner Cable deal, a big upcoming spectrum auction, and -- oh yeah -- the whole net neutrality kerfuffle. With all that happening at once, something could easily fall through the cracks and either experience significant delays and/or end up with a sub-optimal solution.
It’s still way too early to be sure how this deal will affect enterprise IT, but when you’re talking about a company that provides broadband service to 11.3 million customers and wireless service to 100 million subscribers spending almost $50 billion on a risky acquisition, it would be naive to think the enterprise won't feel any of the effects.