Milling rumors of AT&T buyout of EchoStar?
By Ryan Block 
posted Dec 30th 2005 10:45AM
posted Dec 30th 2005 10:45AM
We all
know we're about overripe for a major communications infrastructure industry shakedown between the onslaught of VoIP,
WiMAX, IPTV, and other data delivery mechanisms that undermine swaths of the traditional wire-line infrastructure. But
it looks like AT&T, the company with a long, sordid past (who announced this week to spend nearly half a billion
dollars to refresh its brand in 2006) is the object of some big acquisition rumors -- the subject being satellite media
heavyweight EchoStar (known, of course, for their DISH brand).
Apparently analysts believe an AT&T buyout of DISH wouldn't be entirely far fetched due to the pair's ties in
currently existing partnerships, and the fact that in order for AT&T to stay competitive, it's going to need to
offer the same kind of triple/quadruple-plays (i.e. home and cellphone service, video, and Internet) companies like
Verizon already have (or are in the process of formulating offerings for, like Sprint Nextel's
major cable co. tie-ins). Video, of course, is AT&T's missing link here, but is the newly re-merged giant
prepared to buy up yet another business with a 12 billion market cap -- on top of already mounting debts in
acquisitions and laying fiber-to-the-home infrastructure that could well cannibalize DISH's business anyhow? Sounds
like this could be biting off a lot more than they could chew, but then again it wouldn't exactly be out of character
for AT&T to be, um, aggressive, now would it?Read
Echostar owns Dish, who owns Sirius... I just hope AT&T doesn't get all Disney on my satellite radio.
well... SBC now owns AT&T, so it's SBC spending $500mil to revamp their image
so SBC owns AT&T, who will own EchoStar, who owns Sirius,who has Stern, so my DSL should be able to pick up Howard Stern on channel 100 and 101
Where are you guys getting that Dish owns Sirius? As far as I'm aware, they are separate companies -- both publically traded under their own stock tickers.
Being Echostar is my former company let me set some rumors straight. Echostar does not own Sirius. They just have a partnership with them and own a large portion of there stock but not controlling stake. SBC which is turning into AT&T has a partnership with Dish for carriage of video in the fringe areas where the fiber cannot deliver. SBC already made an offer to buy DISH but it was turned down because Echostar is 90% owned by the CEO Charlie Ergin. I would not put it past this happening again because Echostar has no long term plans for internet like DirectTV has with the new wirless plans comming up.
Meanwhile AT&T Wireless has ceased showing up on my AT&T cellphone (it always says Cingular now), inspite of the previous announcement that the merged company would be called AT&T Wireless.
I am suprised this rumor is floating around since SBC (now known as ATT) has been working on IPTV.
Maybe they are wanting the infrastructure to help provide their IPTV service. Thus a person could receive Dish via satellite or IPTV.
Sounds like AT&T wants to compete more with Comcast who is going to be their biggest rival in the communications field, if they aren't already.
I do remember the days of AT&T Cable TV here in Washington, they had decent customer service, way better than comcast who came in and bought it all up.
I just hope this would drive Comcast to compete instead of just jacking up their prices every 6 months.
"Meanwhile AT&T Wireless has ceased showing up on my AT&T cellphone (it always says Cingular now), inspite of the previous announcement that the merged company would be called AT&T Wireless."
Cingular will remain, AT&T Wireless will be an MVNO.
I thought this was cleared up a couple of months ago. *shrug*
your story makes two mis-statements about AT&T. First, they're not awash in debt, since their last major acquisition (of legacy AT&T) was financed with equity, not debt. So their balance sheet is actually quite strong, and can support more debt for another acquisition. Second, AT&T is not embarking on fiber to the home upgrades. Its main solution is fiber to the node, which is about two-thirds cheaper to set up than fiber to the home. To date, Verizon is the only Bell committed to fiber to the home as its core technology platform.
If 23 BILLION is not awash in debt, then I don't know what is. Sure, some fee-hungry investment bank would extend them credit to buy another company - but at the expense of S&P and Moody's slashing their credit rating to worthless junk status. But that's what SBC (oops, AT&T) deserves, to crash and burn in their own greed and excess.
Debt is meaningless in absolute terms. One needs to recognize AT&T's overall size and earnings capacity when discussing how much debt it can support. AT&T may have $23B in debt, but the company will also generate $26B in earnings before depreciation, interest and taxes next year, and nearly $8B in after tax income. Most financial analysts will tell you this is more than sufficient income to support the current debt load, and then some.
This speculation story is complete BS. These rumors are coming from the cable industry -- most notably Comcast and Time Warner -- who both want Wall Street investors to think that the telecos (AT&T, Verizon, and Bell South) are wasting their money by investing in the video marketplace. By saying that AT&T is interested in EchoStar the cable folks are suggesting that AT&T doesn't believe its Lightpath project is going to be successful. If this was true, or even a suggestion that this was true, would drive down the stock price of the telecos and make it more difficult for them to continue rolling out their new video service. There are two more points: (1) The Chairman of EchoStar is not going to sell his company this year or next -- guaranteed; and (2) my comments should not be taken to say that Lightpath, Fios, or any of the teleco's planned video service offerings are going to succeed, it's just that the telecos haven't given up on their plans just yet.
AT&T IPTV is actually called Project Lightspeed not Lightpath. Here is the link to their page disucssing their Project Lightspeed which has recent news releases concerning the project.
http://www.sbc.com/gen/press-room?pid=5838