Trade Speech

Market Conditions and Competitive Analysis

Team B: Aaron Dwoskin, Angelica Duran, Earlene Espy and Herlinda Tapia

ECO 365

May 27, 2014

Fariba Kheramand

Market Conditions and Competitive Analysis

How does a telecommunications giant like AT&T remain relevant in its industry? Well, for over 139 years the firm continued to implement innovative corporate strategies to enhance products and services while competition conditions were scarce (AT&T, 2014). Nonetheless, one of the most powerful competitive forces is rivalry in a competing market. AT&T is known well for local telephone services, global networking data, broadband services, and wireless services. However, the firm strives to expand and offer differentiating products to their consumers; hence a merger with Direct TV, the #1 Satellite TV distributor (AT&T, 2014). Team B has chosen to analyze the potential marriage of these two media moguls, type of merger, government policies and regulations related to externalities, global competition, as well as the industry’s response.

Details of AT&T and Direct TV Merger

Recently, it was reported, in multiple news outlets that AT&T is acquiring DirecTV for nearly $50 billion dollars. At nearly $50 billion dollars, this is obviously a large merger/acquisition. AT&T, with their historically heavy presence in telecommunications, is now beginning to look at a wider offering of television services beyond that of their “U-Verse” television services. With the merger of a satellite television giant, like DirecTV with over 20 million subscribers, now AT&T will have the ability to provide and offer follow on services, like high-speed internet, phone, and television all in a single package or service bundle; following much of their terrestrial television and telecom providers across the country, like Comcast (Rogowsky, 2014). With a market that is this size and players this large, very few smaller competitors are in the market of providing...