Vodafone shares have shed 0.9 per cent this morning, following news that telecoms firm AT&T is buying satellite television provider DirecTV.
The $48.5bn deal will create not only a fierce competitor to other cable companies, but significantly lowers the odds that AT&T will continue considering buying Vodafone.
The merged firm will have around 26m video subscribers, with a broadband network reaching over 70m customer locations. It’ll be able to offer customers the industry’s holy trinity: phone, broadband and video services.
AT&T has been growing fast on the back of a pretty aggressive merger strategy. Vodafone’s loss of value this morning is because the US firm had eyed it up, as it focused on acquisitions in Europe. But the Comcast purchase of Time Warner Cable in February has shifted AT&T chief executive Randall Stephenson’s priorities back to the US, he said earlier this year.
The DirecTV deal would give AT&T the size and clout it’d need to take on the Time Warner Cable and Comcast Corporation but, in addition to shunting Vodafone out of the picture, it also limits AT&T’s deal prospects outside of the US.