Pay-TV mega giants consider consolidation

Established pay-tv companies, DirectTV and AT&T, are looking to consolidate leaving Dish Network as the odd man out. These satellite and cable giants are combining forces due to increasing subscription declines as the modern consumer instead, chooses video streaming options with the likes of Hulu and Netflix.

According to Leichtman Research Group, 13 of the largest multi-channel video providers began experiencing customer declines in 2013, however, Comcast had the biggest hit with 26 consecutive quarters of subscriber losses until the end of last year, when the company unveiled its $45 billion intention to purchase Time Warner Cable, fueling anticipation of additional telecom mergers.

Subsequently, the US tele-giant decided to sell 1.4 million subscribers to Charter Communications, a deal worth $7.3 million, as well as spin off an additional 2.5 million of its customers pending approval of its Time Warner Cable purchase.

At the same time, there’s been much speculation about a potential merger between Dish and DirecTV, however, sources report that AT&T is near the end of buying DirecTV for about $50 billion.

Craig Moffett, a senior research analyst at MoffettNathanson, says that Dish will be left “high and dry” and that “Dish would be left with very few attractive options.”

There are still potential opportunities for Dish in the TV and mobile industries, given their large reserve of wireless spectrum as the industry continues to show interest in quad-play packages such as television bundles that include Internet, phone and mobile service.

While some industry analysts wonder if Dish isn’t a better match for AT&T than DirecTV, Macquarie Capital senior analyst Amy Yong says, “What we don’t know is how regulators would view AT&T and Dish coming together.”

Dish chairman, Charlie Ergen, remains unphased over this year’s rapid-deal making and suggests that companies such as AT&T  “would be crazy not to look at DirecTV. I wasn’t a very good poker player, but when a bunch of drunken fools were throwing money around, occasionally I was able to pick up a pot at the end of the day,” Ergen explained, saying he “always felt it was better just to sit back and watch them go at it.”

Dish Mexico (Alcanzca) is a Mexico venture of US communications Company EchoStar Corp. (49 percent) and privately held Mexican media Company MVS Comunicaciones (51 percent).

Dish Mexico, which is also available in the US., offers 40 channels including Fox, Warner / Turner channels, over-the-air channels Azteca, Gala, Canal, as well as Discovery and two public channels. Dish currently has 2.2 million Mexican subscribers for their satellite television service.