AT&T plans to bundle pay-TV service from DirecTV with wireless broadband — delivering speeds of up to 15 megabits per second or more over dedicated spectrum — in rural areas, with the telco looking at launching the combo service in late 2015, said Ralph de la Vega, president and CEO of the telco’s mobility division.
“We think the video opportunity is huge,” de la Vega said, speaking at Goldman Sachs’ Communacopia conference Friday. “We see a very bright outlook (for pay TV)… that’s why we did the DirecTV deal.”
AT&T has technology “ready to go” deliver high-speed wireless Internet service that’s faster than LTE, because it is delivered a dedicated swath of spectrum. The strategy is that AT&T will be able to deliver one dish at a customer’s home that will provide both TV and broadband, de la Vega said.
Timing of the launch will depend on when the DirecTV deal closes, de la Vega added. AT&T’s proposed $67 billion takeover of DirecTV is pending review by the FCC and other regulators.
DirecTV president and CEO Mike White, also speaking at the Communacopia conference Friday morning, said his best guess right now is the deal with close in early April 2015. He said he is “highly confident” that DirecTV will clinch a deal with the NFL by the end of 2014 for the NFL Sunday Ticket out-of-market live game package. AT&T has the option to back out of the DirecTV acquisition if the satcaster fails to renew the Sunday Ticket deal.
To date, DirecTV has offered “synthetic” bundles with AT&T and Verizon, which combine TV, Internet and phone. But those bundles aren’t integrated, requiring two truck rolls and two separate bills. Last year only 9% of DirecTV’s customers opted for such a “synthetic” bundle, according to White.
“In my mind, this deal is all about putting two complementary businesses together in a way that offers consumers a better choice — and a better alternative to cable,” White said.
AT&T sees opportunities to extend DirecTV service in other areas, too. De la Vega said the telco is planning to expand the satellite TV service into the auto market (as a way of entertaining kids in the back), building on its agreement with General Motors to deliver 4G LTE to the select vehicles.
Meanwhile, AT&T on Friday morning began taking orders for Apple’s recently unveiled iPhone 6, and de la Vega said demand for the new smartphone is outpacing sales of new iPhones last year and 2012. The new iPhone 6 and iPhone 6 Plus, which feature larger 4.7- and 5.5-inch screens respectively and other enhanced features, went on sale at 3 a.m. Eastern.
“It’s a great thing to know you have hundreds of thousands of orders in the hopper before you’ve had a cup of coffee,” he said.
(Correction: An earlier version of this story said de la Vega had cited broadband speeds of 50 megabits per second for the forthcoming broadband-DirecTV bundle; according to AT&T, he in fact said 15 Mbps.)