The expected acquisition of Time Warner by AT&T for $85.4 billion is being watched closely by regulators in the industry. Time Warner is the owner of CNN and HBO, while AT&T is the largest fixed telephone provider in the U.S. and second biggest mobile phone services supplier.
The impending merger of these companies will rock the media industry as the telecom giant and cell phone provider acquires a company that has now become a byword in the entertainment industry.
With the ongoing 2016 U.S. presidential campaigns, the imminent purchase has been mentioned as an area of concern as Republican presidential candidate, Donald Trump, vowed to oppose the deal if he is elected. Democrat senatorial Al Frankern expressed caution in pushing the transaction as it might enable the resultant company to control a big chunk of the media industry.
Phone companies with internet connections seek opportunities to procure additional revenues by buying productive media companies that use their services. The merger of NBC Universal with Comsat was made specifically for this purpose. After purchasing AOL last year, Verizon is now proposing a digital ad business with Yahoo.
Denied by regulators on its move to acquire T-Mobile, AT&T turned its focus towards television, purchasing DirecTV, a satellite television company at the price of $48.5 billion. With the purchase, the company is presently preparing to launch DirecTV Now, a program targeting users who have no cable subscriptions.
AT&T faces new challenges in the dwindling smart phones market which has nearly near saturation point. It is expecting competition from Comsat, a cable service company that will soon launch cell phone services for its clientele.
The merged company, to be headed by AT&T CEO Randall Stephenson, will enable AT&T to offer new and unique services to its customers considering the range of entertainment that the Time Warner group can provide.
The entertainment world always gets more exciting after every giant merger.