Let me see if I get this straight. It was OK for Comcast (CMCSA) to acquire NBC Universal which is a massive network of many different television and news networks, stations and content. It was OK for Verizon (VZ) to acquire AOL and Yahoo and create Oath. But it’s not OK for AT&T to acquire Time Warner because of CNN? This makes no sense.
As the television industry continues to grow and transform, shouldn’t we encourage more competition? We shouldn’t stand in the way of a changing marketplace. That’s not the way America is supposed to work. Unfortunately, CNN may have created this problem.
Over the last several years I have been saying we will see more of this kind of merger activity as the television industry continues to transform. This is good. Without this innovation, we would be stuck with the rotary dial phone and no wireless or smartphones. Without this innovation, we would be still driving the Ford (F) Model T, not Tesla (TSLA).
AT&T Time Warner, Comcast NBC Universal, Verizon Oath Yahoo AOL
We must encourage innovation and change. That’s what creates this new and amazing world we live in. This let us create the Apple (AAPL) iPhone, Google (GOOGL) Android and Samsung (SSNLF) Galaxy. This is where Google, Amazon.com (AMZN), Facebook (FB) and others came from. The smartphone, the computer, the Internet, self-driving cars, AI, IoT, the Cloud, AR and so much more.
That’s why I always thought this AT&T (T)/Timer Warner (TWX) merger would be easily and quickly approved. It’s similar to the Comcast NBC Universal merger of several years ago. That merger has proven very successful. Or that of Verizon, AOL and Yahoo creating Oath. This is the path the industry is now heading in.
So, when AT&T announced their intention to acquire Time Warner, I thought it made perfect sense. That would make several heavy hitting competitors in this new space. Innovation and competition is always best. I also expect to see more deals like this, although there are not that many other possibilities.
AT&T is a Leader in Innovation
We will also begin to see deals between other kinds of companies like Google, Amazon, Apple, Netflix (NFLX), Facebook and others. We will see other non-related companies get together, innovate and create something new. I expect over the next several years we will see many other non-conventional deals. This is the wave of innovation that transforms America over and over again.
When AT&T acquired DirecTV it launched a new wave of innovation and choice. Innovation like DirecTV NOW, giving customers choice of channels and content never available before at a variety of prices. It created wireless TV or mobile TV letting users watch television on their smartphones, tablets or computer screens anywhere in the USA.
AT&T is a leader in innovation and this is what we can expect to continue with the Timer Warner acquisition.
This is a deal for is about AT&T and Time Warner shareholders, customers and the entire changing industry. This will create jobs for workers. This will create wealth for investors. This will create innovation like we saw with the DirecTV deal. Isn’t that what we should be encouraging?
This is going to allow AT&T to continue to grow. It will expand the entire industry. It’s just one part of many in a changing industry. It will let them continue to compete with companies like Comcast NBC Universal, and Verizon Oath and others that will come next. And isn’t that what we should be encouraging?
Jeff Kagan is an Equities.com columnist. Kagan is a Wireless Analyst, Telecom Analyst, Industry Analyst, speaker and consultant. He follows wireless, wire line, telecom, Internet, cable TV, IPTV, Cloud, Mobile Pay, FinTech and communications technology. Email him at [email protected]. His web site is www.jeffKAGAN.com. Follow him on Twitter @jeffkagan.
