A d v a n c e d Te l e v i s i o n
LatAm
Market Briefing 2017
AT&T considers LatAm TV asset
AT&T
is reportedly
evaluating
either a sale of
its pay-TV operations in Latin America, or an
Initial Public Offering (IPO) as it seeks to pay
down debt following its planned $85.4 billion
acquisition of Time Warner. The public market
could value the business at $8 billion to $10
billion, depending
The company
on which assets are
has also said in
included.
the past that it
AT&T is
would be open
understood to be
to a strategic
working with a
combination in
financial adviser
the region.
to field interest in
the assets. Liberty
Global, Spanish telco Telefónica and wireless
player Millicom International Cellular,
are some of the companies that could take
an interest in all or parts of AT&T’s Latin
American markets.
Analysts say there is no guarantee that
AT&T will be successful in selling the business,
which includes satellite and cable television
services in Brazil, Colombia, Venezuela,
Argentina and several other countries, and
could still decide to keep the systems.
It is understood that AT&T is not interested
in selling its pay-TV business in Mexico, since
it has been investing in wireless services in the
country. It acquired these TV operations as
part of its $49 billion acquisition of DirecTV
in 2015.
AT&T has been
reviewing its portfolio
to find ways to help
pay down its debt load,
which will increase to
about $180 million once
its acquisition of Time Warner closes. AT&T
expects the Time Warner acquisition to close
by the end 2017. The deal is currently under
antitrust review by the US Department of
Justice.
In mid-September AT&T’s chief executive,
Randall Stephenson, told delegates at a
Goldman Sachs conference that every year the
company “monetises a number of assets that
strategically don’t fit and aren’t in the long-
term game plan of the business”. The company
has also said in the past that it would be open
to a strategic combination in the region.
Ever since AT&T acquired DirecTV it has
been ambivalent about the Latin American
assets that came with the deal. Those
businesses include satellite-TV services in the
Caribbean and in South American countries
from Colombia to Argentina, plus a 93% stake
in Sky Brasil and 41% of Sky Mexico.
AT&T’s main focus has been on preparing
to integrate Time Warner’s media business,
automating its own vast
landline network and
developing a new 5G wireless
network, all while continuing
to expand mobile service in
Mexico. Because the Latin
American TV assets aren’t integral, AT&T
could find it attractive to sell the business or
take it public to shore up its balance sheet.
In the second quarter, AT&T had 13.6m
total subscribers in Latin America, excluding
Mexico, and generated total revenue of $1.4
billion. AT&T also owns PanAmericana,
which offers satellite TV services under
the DirecTV brand in countries including
Venezuela, Argentina, Chile, Colombia and
Puerto Rico.
AT&T executives have, on a number of
occasions, talked about using the telco’s
various TV operations in Latin America as
a way of extending the reach of some of its
future Time Warner programming.
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