Revenue: $9.80 billion*
Profits: $1.76 billion*
Telecom giant AT&T has seen the future of its nascent cable empire rise and fall in the space of just a few years. Now, AT&T Broadband, born of a dream to reinvent its stodgy parent as a 21st-century tech powerhouse, looks headed to be swallowed by Comcast Corp. in the biggest cable merger ever.
AT&T Broadband is the No. 1 cable operator in the country, boasting nearly 14 million subscribers. That includes more than 3 million digital customers and 1.5 million high-speed Internet users.
The cable behemoth came into being thanks to the vision of AT&T topper C. Michael Armstrong, who believed old Ma Bell should be delivering all her services, including telephony, data services and even video-on-demand, over cable’s coaxial wires.
To fulfill that vision, the ambitious exec spent more than $100 billion to acquire regional cablers all over the U.S., creating unprecedented economies of scale.
Shifting gears, Armstrong announced that AT&T would split up its operations, first spinning off its AT&T Wireless unit, and later agreeing to sell off its cable division to Comcast in a merger deal worth roughly $70 billion.
If the deal goes through, the new company will be far and away the biggest player in cable TV. Its subscriber base would almost double that of its nearest rival, AOL Time Warner’s Time Warner Cable.
But while both parties remain publicly confident that all is going according to plan, regulators have been increasingly vocal in their concerns over power the combined company would enjoy — particularly in negotiating deals with content owners.
*AT&T doesn’t break out profits or losses for the unit.