Telefonica kicking tires on DirecTV Latin America, Reuters says
Spain-based media giant Telefonica SA is considering the possible purchase of AT&T's (NYSE: T) Latin American assets, according to Reuters.
Citing unnamed sources close to the discussions, Reuters said the assets include primarily cable and satellite TV operations in Brazil, Colombia, Venezuela, Argentina and several other counties that were purchased last year as part of AT&T's $49 billion acquisition of DirecTV.
Liberty Global is also interested in these assets, according to the report, which added that AT&T has not decided to sell these Latin American assets to Telefonica or anyone else.
Latin America has been DirecTV's fastest growing region the past several years, and it now touts around 19 million subscribers in the area. Profits, however, have been challenged by depreciating currencies in countries like Brazil.
Speaking to investors in December, AT&T CEO Randall Stephenson said the company would consider selling its recently acquired Latin American assets, but was in no hurry.
"So if somebody were interested in talking about a strategic combination of those assets with a different product, we would have to look at it. Would we consider selling them? Yes, but we are in no rush," Stephenson said.
Those statements reflect a shift in attitude among AT&T executives, who — in the run-up to the closure of the DirecTV purchase — openly touted the potential of the Latin American market.
"Latin America has an under-penetrated pay TV market, about 40 percent of households subscribe to pay TV, and a growing middle class, and is DirecTV's fastest-growing customer segment," AT&T said in a corporate statement released just days after it announced its intentions to buy DirecTV.
Telefonica already has a significant wireless presence in Latin America under the brand Movistar.
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