According to the article, AT&T to Buy DirecTV in $49 Billion Deal, Creating Pay-TV Giant, AT&T agreed to buy DirecTV in 2014. After these two companies merge, their subscribers would be 26 million people, and it is the second biggest number in the United States. The biggest giant of American pay-TV is the merger company which is by Comcast and TWR, and they have about 30 million subscribers. With this merger, AT&T can package their wireless phone and internet service with home TV subscription. Therefore, the DirecTV subscribers should be able to buy cheaper wireless phone service than past if they use this package, and AT&T users also can subscribe home TV service cheaper than past. This merger makes both AT&T and DirecTV customers happy because they have opportunity to decrease costs paid for these services. In addition, AT&T and DirecTV also can integrate their customer service department and cable, and it is good for increasing their efficiency and decreasing cost. …show more content…
Usually, variable costs means the payments for resource used to producing output. Resource and labor are included variable costs. In the cable and internet services, firms don’t have any plant and produce goods, so their payments of variable costs are only for their labor. Fixed costs includes their payments for equipment, insurance, and rental payments. These service companies have a great deal of equipment because they have greatly long cables around the country. Therefore, I guess AT&T and DirecTV are paying relatively large amount of costs for their fixed costs, while their variable costs are relatively smaller than fixed costs. If these two companies merged, they can integrate each equipment, and abandon some cables which are overlapping in same area. Merger is very good way to decreasing fixed costs for this kind of
Fixed expenses are those that will be there everyday the lodge is open regardless of the number of skiers. The Lodge is open 200 days per year and the cost of running the new lift is $500 per day for the entire 200 days giving us $100,000 in fixed costs. Variable costs are the expenses based on the number of customers. There is an additional $5 expense per skier per day associated with the new lift. If there are 300 skiers multiplied by $5 each multiplied by the 40 days that they are expected to be on the lift, we will have $60,000 in variable expenses.
Robert Zimmerman, the senior vice president of business development, for American Cable Communications (ACC) was in the process of looking for a potential acquisition target for ACC. In December 2007, Zimmerman remember a presentation that was made recently by Rubinstein & Ross (R&R). R&R was a boutique investment bank that was well known for doing deals in the media and telecommunications area. During this presentation it was suggested that ACC buy out AirThread Connections (AirThread) which is a large regional cellular provider. The current industry of these companies were moving more toward bundled service offerings and by adding AirThread it would help ACC cover an area of service it does not currently offer. In order to determine if the acquisition should be done an analysis needs to be done.
In the year of 2005, the companies eventually found a way to make it easier for the companies to combine without having any major issues or problems. Unfortunately, around the year of 20010 the merging com...
Proper explanation of the current situation, involving the type and extent of the current problems. And the merger will bring progress over the current situation.
This merger will bring a wide array of products to a larger group of consumers. Currently consumers looking to buy home appliances like stoves or refrigerators have to go to a mall with a Sears store or a specialty store like Best Buy or Circuit City. Not all consumers live near a mall, so buying from Sears may not be an option. Although bot...
Television, the phone, and the internet. These inventions have uniquely shaped the 20th century and have led to the 21st century being known as the age of information. These services are the primary ways we communicate, express ourselves, and reach out in our ever increasing global world. In the United States, these services are provided by a number of different firms, chief among them is Comcast, being the largest provider of Cable and internet in America, and a large telephone provider. Next to it stands Time Warner Cable, the second largest provider of cable in the United States. The decision for Comcast to buy Time Warner Cable for forty-five billion dollars in 2014 has led to many criticizing the merger, calling it a monopoly. Others have called the whole cable system an oligopoly. For it to be a monopoly or an oligopoly, it would have to fit their respective categories. The merger between Comcast and Time Warner Cable would not create a true monopoly, but would give it significant market power because it has monopoly resources and can be considered a natural monopoly. It will also further its power in a market dominated by oligopolies. People argue that it is not a danger to Americans for this merger to happen, but when one looks at the practices Comcast already uses, it paints
In conclusion, AT&T has become more organized and improved its tactics to target the younger consumer of their products by adding IM, internet and text messaging to their plans. Even landline connection free due to the Unity Plan and the rollover minutes can make your life more talkative and productive. They also have increased their profit by extending their name to your TV when you purchase U-verse. And now you can make your decision. Wouldn’t you be more comfortable with AT&T products to comfort your life?
Channel Exposure- AT&T is adequate in its point of sales. They intend to match most competitors in using Radio Shack, BEST Buy, Walmart, Mall locations, high visible real estate traffic.
The market penetration of TiVo has been very poor. Fourteen months after its introduction only 0.04% penetration has been achieved out of the total of 102million TV watching population. This is also reflected in the poor revenue position of the company. Exhibit 3 shows that the company recorded a loss every quarter since the introduction of the product in September 1999 and has been getting worse.
In this industry, companies need to provide a national network, meaning that there are significant economies of scale to be made with a merger. For example, when T-Mobile and Orange decided to merge, their ambition was to combine both networks, eliminate duplication and create a single super-network. Furthermore, they said it would provide the customers with a bigger network and better coverage .
The telecommunications industry is of vital importance to the development of the information-based economy. AT&T need to supply access to cost efficient, timely and innovative telecommunications services.
Growing from a small provider of a few thousand, the company has grown to be a massive conglomerate encompassing far greater than simply cable services. Now owning NBC Universal, Comcast exerts great power within the market, employing a variety of strategies to expand itself and remain profitable. When it attempted to merge with Time Warner cable, several strongly opposed when considering the massive power it already possessed. In addition, growing sentiment against cable providers has resulted in the reduction of subscribers. Despite this, Comcast is in a high period of expansion within the business cycle. However, it should remain cautious of the changing environment of how consumers obtain television
After reading the article in the Wall Street Journal and taking the self assessment I believe that my attitude towards the company will not change much. After reading the article I would probably be more excited to work for the new "T-Mobile". A merger of this size would have to excite many of their employees. With this kind of attitude towards the company, I believe that i would look for the potential for positive impacts of the merger. I would look at what I can gain most from the merger. The merger may help T-Mobile with its cellular reliability which could have benefits for the company as a whole if their product is higher quality. This merger might mean that I can move to a new city that fits my personality better if the first city that
In fact, some of the biggest threats to the company’s growth are the government’s regulation that increases the risk to the underlying business. In addition, the risk of losing the exclusive contract for the iPhone would be a major loss for AT&T. Most of the consumers choose AT&T because of their exclusive contract for the iPhone. Hence, this loss of business will significantly influence the AT&T's profitability and revenue. Moreover, the antitrust authorities play an important role on approved the merger of AT&T.
The first way is achieving a high turnover in service for example a restaurant that turns tables around very quickly, or an airline that turns around flights very fast. This approach means fixed costs are spread over a larger number of units of the product or service. This will result in a lower unit cost. Large businesses do this to create an entry barrier to prevent potential competitors from competing with their product. As they are unable to match the scale necessary to match the large firms low costs and prices.