The major merger series was to transform AT & T from the old phone drive into a smooth web video and ad. Instead, customers move toward the outlets because AT & T raises prices in an attempt to pay off the growing debts of the merging company.
The acquisition of $ 67 billion in DirecTV satellite television from AT & T in 2015 not only eliminated the competitor, but the combined weight of the two companies enabled AT & T to have a greater impact on programming negotiations. Time Warner's $ 86 billion acquisition last year has given AT & T's ownership essential, it has to have programming like HBO, providing additional competitive advantage.
AT & T executives announced that the merger will bring "a new approach to the way the media and entertainment industry works for consumers, content creators, distributors, and advertisers." But some analysts at Wall Street have expressed concerns that the debt would arise by merging the company with that goal unsustainable.
Now it looks as though the Wall Street analysts were concerned.
AT & T's earnings in the fourth quarter, released on Wednesday, was not beautiful. The company has lost 403,000 incredible Satellite Directors subscribers in one quarter. And while AT & T still serves 19.22 million satellite television users, more than 1.4 million DirecTV clients have run away from satellite TV providers over the past two years.
Customers switching from cable or satellite television to digital options such as Netflix – often referred to as cable cuts – have been hit by numerous TV providers because customers are fleeing from the modern alternatives. Studies have shown that these difficulties are largely triggered by the sudden increase in pay-TV rates, although the historically-terrible customer service industry also plays a role.
In 2016, AT & T launched its own streaming video service: DirecTV Now, at a cheaper price than the traditional cable television company offer. But things do not go the way AT & T plans there. According to AT & T's distribution of profits, AT & T has lost 267,000 subscribers DirecTV Now in the last quarter, or amazingly 14 percent of the total number of subscribers.
Sector analysts believe that these discrepancies were largely due to the $ 5 price increase imposed during the summer and the abolition of promotional discounts. AT & T has made it clear that subscribers of DirecTV Now should expect more walks and fewer promotions to move forward.
"As these customers are billed, we will approach market prices," said John Donovan, AT & T's executive director last November. "We will honor our customers, but it will increase."
Between DirecTV's Time Warner deal and acquisition, AT & T became independent with incredible $ 160 billion in just three years.
"Our main priority in 2019 is to reduce the debt from our acquisition in Time Warner," AT & T chief executive Randall Stephenson told reporters this week.
But Wall Street analyst Craig Moffett, a long-time analyst at MoffettNathanson Research, told the motherboard that he did not believe the current AT & T path was financially viable, given that price increases would probably only boost customer shortages, creating a perfect circuit of dysfunction.
"They do exactly what they promised," Moffett told me to exchange emails. "They said they would take advantage of the free cash flow and pay their debts, and now the market is getting closer and more personally looking at how it looks. Raising subscriber prices and losses even faster. "
AT & T has been making great progress in recent years by killing consumer protection such as network neutrality and disrupting FCC monitoring, pushing for efforts to create anti-competitive revenues such as excluding AT & T's own streaming content from usage restrictions while punishing Netflix users.
But Moffett suspects that this will be enough to correct the AT & T ship. He believes that AT & T could achieve its financial targets for 2019, but could be "at a price even more ugly in 2020".
"It is interesting that most of the most aggressive strategies, such as trying to keep Key Content content from Time Warner exclusively for DirecTV or their wireless business, really damaged short-term results," Moffett said.
When the motherboard is commented, AT & T will only say that the company was clear about its bid to eliminate debt promotion and debt, pointing out that the company had paid $ 9 billion in debt since the contract was signed. He also quickly insisted that current price fluctuations are in line with comparable services such as Hulu + Live TV and YouTube TV.
But as the motherboard reported, part of that debt was eliminated due to the upswing, despite the fact that AT & T received tens of billions of tax-deductible tax and regulatory services from Trump's administration. Many AT & T customers are particularly upset by the company's network neutrality attack, which is also an incentive to increase consumer spending.
The hurting of already frustrated clients with an even greater price increase – for the payment of mergers that no one wanted – is likely to soon not improve the image of AT & T.