Free HBO Comes to AT&T Unlimited Customers, but What’s the Real Cost?

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RingPlus News Service Los Angeles, April 18th, 2017: AT&T unlimited data customers will be able to enjoy HBO for free, the latest service in a long line of new products available thanks to the company’s recent mergers and acquisitions. AT&T is shelling out major cash to acquire competitors and companies that could create synergy, adding to the giant’s current offerings. AT&T’s wireless TV products came more recently, injecting additional products and services in customers’ hands on the go. Now, AT&T’s push in the mobile TV space is amplified by offering certain mobile customers free HBO. The result? A price war, with a side of massive mergers and acquisitions and creative new services.

Can AT&T boast solid profits with a price war and multiple acquisitions on its plate? In addition to AT&T’s price-focused attempt at bucking Verizon for more market share, the acquisition of Time Warner, HBO’s parent company, looks like it may be successful given the Trump administration’s pick as chairman of the FCC, Ajit Pai. While that deal cooks, AT&T has already moved full steam ahead and snapped up Straight Path Communications for $1.25 billion in stock. The move gives AT&T access to Straight Path’s licenses to 28 GHz and 39 GHz millimeter wave spectrum, a major step toward the company’s 5G network. This kind of action doesn’t come cheap: AT&T paid a premium of 162.1% to seal the deal. On top of that, a hefty $15 million payment must be made to the FCC following claims that Straight Path renewed airwave licenses by submitting false data.

The good news for the companies (not for the IRS or the American people) is that the $1.6 billion is tax-free. Wells Fargo analyst Jennifer Fritzsche says AT&T should be able to compete with Verizon regarding the amount of spectrum. However, both Verizon and AT&T are in the pits, according to Wall Street analysts who lowered first-quarter profits expectations for the 2 companies. Verizon, typically immune to price wars, finally took the bait after T-Mobile’s unlimited data plans became increasingly popular. The competition is fierce, the deals are high priced, and the outlooks are shaky. All of this market action could be a big bet on billions, or a major misstep.




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