Satellite is cheaper than fiber - AT&T Buys DirecTV



In the modern telecom post-regulatory world, a customer relationship is a special and rare item that should define a company.  All service needs of the company are fair game – including (in relatively historical order of customer adoption), telephone, Pay TV, broadband, home automation, payment systems, automotive telematics, eHealth tracking, etc, are fair game.  Networks are not defined by a single type of network – no longer just twisted pair, coaxial cable, satellite, or cellular, but by the services they enable. 


European operators including Orange, Vodafone, Telefonica and (to a slightly lesser extend) BskyB have led this charge – moving from mobile services and a triple play (phone, broadband, video) offering to a true quad-play offering. 

With AT&T's acquisition of DirecTV, it now enters this class of "Consumer-Centric, Distribution Agnostic" companies. Of course, the cost of satellite is less expensive than pushing fiber into many areas where AT&T has a footprint.  For some time (at minimum 3 years), AT&T will offer separate U-Verse and DirecTV packages -- in some part to keep regulators happy that competition remains in markets served by AT&T U-Verse today.  However, content licensing is a big business and the combined company is in a stronger position.

In addition, DirecTV gained a signifcant Latin American footprint - it will be interesting to see how international expansion unfolds!