Kagan: Will Verizon Soon Have a Competitor to AT&T’s DirecTV?

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Something interesting is happening in the wireless world. The two major carriers seem to be heading in new and exciting directions for growth. AT&T (T) acquired DirecTV about a year and a half ago and is reinventing the entire television. They created the new mobile TV space where customers can watch TV on their smartphones and tablets over the wireless network. Rumor has it that because of AT&T’s success, Verizon’s (VZ) CEO may be thinking about doing something similar and acquiring Charter (CHTR) or Comcast (CMCSA).

Reinventing the television world is a big deal. Verizon is in a multi-year process of reinventing who they are. They have already acquired several other companies like AOL. Yahoo (YHOO) is another if they can get that deal done. However, while Verizon struggles to put the pieces together, AT&T seems to be moving ahead with their growth plans. One of AT&T’s avenues of growth is their DirecTV acquisition and creating a new wireless TV or mobile TV space. This lets customers watch TV anywhere in the USA on their mobile devices.

Will Verizon Acquire Charter or Comcast?

This idea seems to be successful for AT&T, so Verizon CEO Lowell McAdam seems to be toying with the idea of following them to the party. Who would Verizon acquire? Verizon is a big company, so to move the needle, they need a big cable television company. Today, the leaders in cable TV are Comcast with Xfinity and Charter with Spectrum. Charter recently acquired Time Warner Cable (TWC) and became number two.

The cable television industry had a lock on the marketplace for far too long. With no competition, they could continue to charge high rates and not care about customer service. That created a bad relationship with the customer. So, when the customer had a choice, many of them decided to pull the plug.

Traditional Cable TV is Losing Market Share

The good old days for the cable TV industry have passed. They have been losing market share in recent years. With new competition from IPTV and others, traditional cable TV market share is shrinking.

Customers are moving away from traditional cable TV to new competitors including IPTV, satellite TV, mobile TV and more. AT&T Uverse, DirecTV, Verizon FiOS, CenturyLink Prism (CTL), Netflix (NFLX), Amazon (AMZN), Hulu and so many other new competitors are transforming the entire industry.

To make matters worse for traditional cable TV players, new competitors are introducing innovation like mobile TV and new choices like less expensive bundles of television channels that customers have been asking for.

T-Mobile Says Verizon in Mid-Life Crisis

According to T-Mobile, Verizon is in the middle of a mid-life crisis. They say, new look, new spokesperson, trying to reinvent itself, acquiring other companies, obsessed with youth and more. I have been thinking some of these same thoughts and sharing them with you for a while. So, what does the future look like for Verizon and Verizon Wireless?

There is a real growth opportunity which AT&T has been focused on and their success has caught the attention of Verizon. So, will Verizon acquire Charter or Comcast and get into the cable television business? If so, will they aggressively expand the services and choices and lower the cost to customers? Will they move to mobile TV and be a competitor to AT&T DirecTV?

The truth is we simply don’t yet know. Verizon has made no official announcements on this yet. In fact, I don’t think Verizon is finished investigating and pondering the possibilities. Heck, this may just be an idea the CEO is kicking around.

However, this is a juicy idea and if they do it, they may finally make an acquisition that is more exciting than the ones they have been making lately. And that would finally be something exciting to talk about Verizon. Stay tuned…

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