Friday, July 24, 2015

AT&T Completes Acquisition of DIRECTV

AT&T completed its acquisition of DIRECTV, making it the largest pay TV provider in the United States and the world, providing service to more than 26 million customers in the United States and more than 191 million customers in Latin America, including Mexico and the Caribbean. Additionally, AT&T has more than 132 million wireless subscribers and connections in the U.S. and Mexico; offers 4G LTE mobile coverage to nearly 310 million people in the U.S.; covers 57 million U.S. customer locations with high-speed Internet; and has nearly 16 million subscribers to its high-speed Internet service.

DIRECTV shareholders received 1.892 shares of AT&T common stock, in addition to $28.50 in cash, per share of DIRECTV.

AT&T said the DIRECTV acquisition significantly diversifies itsrevenue mix, products, geographies and customer bases. As a result of this acquisition, as well as AT&T’s acquisition of Iusacell and Nextel Mexico, AT&T expects that, by the end of 2015, its largest revenue streams will be, in descending order: Business Solutions (both wireless and wireline); Entertainment & Internet; Consumer Mobility; and International Mobility and Video.

“Combining DIRECTV with AT&T is all about giving customers more choices for great video entertainment integrated with mobile and high-speed Internet service,” said Randall Stephenson, AT&T chairman and CEO. “We’ll now be able to meet consumers’ future entertainment preferences, whether they want traditional TV service with premier programming, their favorite content on a mobile device, or video streamed over the Internet to any screen.

“This transaction allows us to significantly expand our high-speed Internet service to reach millions more households, which is a perfect complement to our coast-to-coast TV and mobile coverage,” Stephenson said. “We’re now a fundamentally different company with a diversified set of capabilities and businesses that set us apart from the competition.”

In approving the deal, the FCC imposed a number of conditions that will extend for four years, including:


  • Fiber to the Premises (FTTP) Deployment. Recognizing that the merger reduces AT&T-DIRECTV’s incentive to deploy FTTP service, the Commission adopts as a condition of this merger the expansion of FTTP service to 12.5 million customer locations. This condition also responds to the harm of the loss of a video competitor in areas where AT&T and DIRECTV had directly competed before the merger by providing a pathway for increased competition from services that rely on broadband Internet to deliver video.
  • Gigabit Service to E-rate Eligible Schools and Libraries. In addition, to ensure that schools and libraries also benefit from expanded fiber deployment to consumers and institutions, the Commission is also requiring AT&T-DIRECTV to offer gigabit service to any E-rate eligible school or library where AT&T-DIRECTV deploys FTTP service.
  • Non-Discriminatory Usage-Based Practices. Recognizing that AT&T is the only  major ISP that applies “data caps” across the board to all of its fixed broadband customers and that this merger increases the incentive of AT&T-DIRECTV to use strategies that limit consumers’ access to online video distribution services in order to favor its own video services, the Commission requires AT&T-DIRECTV, as a condition of this merger, to refrain from imposing discriminatory usage-based allowances or other discriminatory retail terms and conditions on its broadband Internet service.
  • Internet Interconnection Disclosure Requirements. Recognizing the importance of interconnection to the operation of online video services, the Commission also requires as a condition of this merger that AT&T-DIRECTV submit its Internet interconnection agreements so that the Commission may monitor the terms of such agreements to determine whether AT&T-DIRECTV is denying or impeding access to its networks in anticompetitive ways through the terms of these agreements.
  • Discounted Broadband Services for Low-Income Subscribers. While finding that the availability of better and lower priced bundles of video and broadband service is a potential benefit of the merger, the Commission also concludes that the public interest requires us to ensure that a bundle of video and broadband services is not the only competitive choice for low-income subscribers who may not be able to afford bundled services. The Commission accordingly requires as a condition of the merger that AT&T-DIRECTV make available an affordable, low-price standalone broadband service to low-income consumers in its broadband service area.
  • Compliance Program and Reporting. Given the important role that these conditions serve in securing the public interest benefits of the merger, the Commission requiresthat AT&T-DIRECTV retain both an internal company compliance officer and an independent, external compliance officer that will report and monitor, respectively, the combined entity’s compliance with all conditions of the merger. 


Some other notes on the transaction:

AT&T announced that John Stankey will be CEO of AT&T Entertainment & Internet Services, responsible for leading its combined DIRECTV and AT&T Home Solutions operations. Stankey will report to Stephenson. DIRECTV President, Chairman and CEO Mike White announced his plans to retire.

AT&T is also developing unique video offerings for consumers through, among other initiatives, its Otter Media joint venture with The Chernin Group. The joint venture was established to invest in, acquire and launch over-the-top (OTT) video services. This includes its purchase of a majority stake in Fullscreen, a global online media company that works with more than 50,000 content creators who engage 450 million subscribers and generate 4 billion monthly views.

http://about.att.com/story/att_completes_acquisition_of_directv.html


  • DIRECTV first launched its satellite-based TV service in 1994.
  • DIRECTV operates a fleet of twelve geosynchronous satellites, including eleven owned satellites and one leased satellite. These include six Ku-Band satellites at the following orbital locations: 101 WL (three), 110 WL (one), 119 WL (one), 95 WL (one-leased), and six Ka-Band satellites at 99 WL (three) and 103 WL (three) orbital locations. The company has contracted for the construction and launch of one new satellite, D15, which is to launch in 2015 and provide additional HD, replacement and backup capacity


Aliyun Vows Data Protection for Customers

At its inaugural Data Technology (DT) event this week in Beijing. Alibaba's Aliyun division announced its Data Protection Pact - a pledge to customers and partners to protect the privacy and integrity of their data.

Here is Aliyun's statement to the technology industry and the entire society:

  1. Customers, such as individual developers, companies, governments, and social institutions, have absolute ownership over any and all data generated on the Alibaba Cloud Computing (Aliyun) platform, including the rights to freely and safely access, share, exchange, transfer or delete their data at any time.
  2. Customers have the right to select whatever services they choose to securely process their data. This data cannot in any way be altered or transferred by Alibaba Cloud Computing (Aliyun).
  3. As such that banks are obligated to protect clients' financial assets, the obligation also falls on Alibaba Cloud Computing (Aliyun) to protect our customers' data. It is the responsibility and duty of Alibaba Cloud Computing (Aliyun) to establish a set of strict management, control and internal audit systems, as well as strive to continuously improve our threat protection, disaster recovery and other capabilities to strengthen the protection we offer to customers regarding data privacy, integrity, and accessibility.

During Data Technology Day event, Aliyun presented its full landscape of cloud-computing products and solutions. Aliyun has developed more than 14 cloud products and 50 solutions for enterprises and individual developers across eight sectors, including gaming, multimedia, e-government, medical treatment, IoT, and finance. Additional solutions are provided by more than 200 companies partnering with Aliyun.

New solutions from Aliyun include Solid State Drive (SSD) cloud storage servers with strong read-write capability, Virtual Private Cloud (VPC) systems used to build hybrid cloud and cloud databases compatible with Oracle systems, and batch computing services used in gene sequencing and computer-graphics rendering.

"The huge amount of data and advanced computing capacity has brought great business opportunities to the industry," said Wensong Zhang, Chief Technology Officer of Aliyun. "Deep learning and high-performance computing have been widely adopted in Alibaba Group for internal use. Aliyun will roll out high-performance computing services and accelerators based on GPU (Graphics Processing Unit) technology that could be applied in image recognition and deep learning to expand the boundaries of business."

http://www.alibabagroup.com/en/news/article?news=p150722a

European Commission Approves Alcatel-Lucent + Nokia Merger

The European Commission gave its stamp of approval to the proposed acquisition of Alcatel-Lucent by Nokia, saying the merger does not raise competition concerns "because the parties are not close competitors and since a number of strong global competitors will remain active after the transaction."

The Commission said it considered the effects of the merger on competition in the field of mobile network equipment, including Radio Access Network equipment and Core Network Systems. The Commission found that, despite the merged entity having combined market shares around or above 30% for several specific types of equipment, the overlaps between the two companies' activities are effectively limited. Indeed, Nokia has a strong presence in the European Economic Area, where Alcatel-Lucent is a small player, and conversely Alcatel-Lucent has a strong presence in North America, where Nokia's activities are rather limited.

The EC cited competition from Ericsson and Huawei, along with the emerging presence of ZTE and Samsung, especially with regards to upcoming 5G.

http://europa.eu/rapid/press-release_IP-15-5437_en.htm

Nokia to Acquire Alcatel-Lucent for EUR 15.6 billion


Nokia agreed to acquire Alcatel-Lucent in a deal valued at EUR 15.6 billion -- a premium to shareholders of 28% (equivalent to EUR 4.27 per share) over the unaffected weighted average share price of Alcatel-Lucent for the previous three months.  Under the transaction Nokia will make an offer for all of the equity securities issued by Alcatel-Lucent, through a public exchange offer in France and in the United States, on the basis of 0.55 of a new Nokia share for every Alcatel-Lucent share. The boards of directors of both companies have agreed to the deal.

Nokia said it was motivated to do the deal because the addressable market of the combined company in 2014 was approximately 50% larger than its current addressable networks market, increasing from approximately EUR 84 billion to approximately EUR 130 billion. The combined company is expected to have a stronger growth profile than Nokia’s current addressable market, with an estimated CAGR of approximately 3.5% for 2014-2019.

Some highlights:


  • The combined company will be called Nokia Corporation, with headquarters in Espoo, Finland and a strong presence in France. It will also have major R&D centers in Germany, the U.S. and China. It will retain its Bell Labs brand in the U.S..
  • For France, Nokia said intends to maintain employment levels consistent with Alcatel-Lucent’s end-2015 Shift Plan commitments, with a particular focus on the key sites of Villarceaux (Essonne) and Lannion (CĂ´tes d’Armor).  Plans also include a 5G R&D centre of excellence in France.
  • Risto Siilasmaa is planned to serve as Chairman, and Rajeev Suri as Chief Executive Officer.
  • The combined company would target approximately EUR 900 million of operating cost synergies to be achieved on a full year basis in 2019. The cost savings will come from organizational downsizing, elimination of overlapping products and services, centralized functions and regional sales organizations. The combined company could reduce overhead costs in real estate, manufacturing, supply chains, IT and overall G&A expenses, including public company costs.
  • The combined company would target approximately EUR 200 million of reductions in interest expenses to be achieved on a full year basis in 2017.
  • For FY 2014, the combined company would have had net sales of EUR 25.9 billion, a non-IFRS operating profit of EUR 2.3 billion, a reported operating profit of EUR 0.3 billion, R&D investments of approximately EUR 4.7 billion, and a strong balance sheet with combined net cash at  December 31, 2014 of EUR 7.4 billion.
  • For comparison in FY 2014, Ericsson had carrier revenues of approximately EUR 25.1 billion, Huawei had EUR 23.5 billion and Cisco had EUR 9.0 billion.
  • In China, Nokia would own Alcatel-Lucent’s 50% plus one share holding in Alcatel-Lucent Shanghai Bell, a company limited by shares supervised by the State-owned Assets Supervision and Administration Commission of China.  

Dell'Oro: Packet Microwave Shipments to More than Double by 2019

The point-to-point Microwave Transmission market is forecast to have near term growth, but will likely decline in the outer years, according to a new report from Dell'Oro Group. During this five-year forecast period, through 2019, Packet Microwave equipment demand is expected to maintain a positive rate of expansion.

Some highlights:

  • Packet Microwave revenue and radio transceivers forecast to comprise a little over 30 percent of total microwave equipment market by 2019.
  • Full outdoor unit shipments forecast to grow at 27 percent compounded annual growth rate (CAGR).

“The market is moving to Packet Microwave,” said Jimmy Yu, Vice President of Microwave Transmission research at Dell’Oro Group. “We are forecasting Packet Microwave radio transceiver shipments to be approximately two and a half times greater in 2019 than they were in the past year. "Comparatively, other microwave radio shipments are expected to only be 33 percent higher. We think the main driver for Packet Microwave demand is form factor and capacity, especially as LTE mobile radio deployments move from macro to small cells. Small form factor, packet, high capacity, all-outdoor microwave units are just better suited for small cell backhaul than the older split-mount systems,” Mr. Yu added.

http://www.delloro.com

IHS Global NFV Market to Hit $11.6 Billion in 2019

The global network functions virtualization (NFV) hardware, software and services market will reach $11.6 billion in 2019, up from $2.3 billion in 2015, according to new forecast from IHS .

Some highlights

  • Service providers are still early in the long-term, 10- to 15-year transformation to virtualized networks
  • Revenue from outsourced services for NFV projects is projected to grow at a 71 percent compound annual growth rate (CAGR) from 2014 to 2019
  • Revenue from software-only video content delivery network (CDN) functions for managing and distributing data is forecast by IHS to grow 30-fold from 2015 to 2019

“NFV represents operators’ shift from a hardware focus to software focus, and our forecasts show this. We believe NFV software will comprise over 80 percent of the $11.6 billion total NFV revenue in 2019,” said Michael Howard, senior research director for carrier networks at IHS. “The software is always a much larger investment than the server, storage and switch hardware, representing about $4 of every $5 spent on NFV.”

http://www.infonetics.com

See also