I think AT&T is too invested in Directv to just sell them off.
Part of the whole reason why AT&T bought Directv was to have another product and service to sell to customers in a bundle so they can tighten their grip on that customer and stop customers from churn.
AT&T wants your cell phone business, home internet and Tv service. They want home phone also but nobody wants a home phone these days.
There will be a point where Directv doesn’t make any sense to use satellites. A few things will have to happen.
#1 AT&T must install fiber to every customer in their foot print.
#2 Directv now needs to go to an internet based set top box solution. Literally plug the genie into eithernet and not connect the satellite.
#3 enough internet providers must offer faster internet so any customers outside of the AT&T footprint can get Directv now.
#4 5g technology must be deployed, where AT&T can use Directv now technology to serve customers via the cellular network.
Yeah, I would agree that AT&T isn't anywhere near the point -- yet -- where they would be OK with spinning off DTV satellite service. It still accounts for a huge majority of their pay TV subs and all those accounts give AT&T a seat at the "big boys' table" when it comes to negotiations with channel providers. But AT&T also knows that satellite TV's best days are behind it at this point. They also know that the traditional cable TV bundle is beginning to crumble a bit (smaller bundles and more a la carte options exist) and average prices are coming down, putting pressure on margins for distributors like AT&T.
So what technology can currently replace satellite as a nationwide pay TV distribution system? The only option is OTT TV -- streaming over the internet to any device,
regardless of who provides the internet service (i.e. it could be AT&T or Comcast or T-Mobile or Verizon or Charter, etc.). AT&T is done with managed IPTV -- Uverse TV -- because (among other reasons) it's restricted to deployment over their own wireline home internet network. AT&T needs a next-gen TV system that is nationwide (to transition as many of those nationwide satellite subs over to as possible, and also to bundle with their nationwide wireless phone service). Their wireline footprint is not nationwide -- it's basically just the South, the Midwest, plus California. So the only possible successor to satellite TV is OTT TV. (And because of the internet-based nature of OTT TV, it also allows for the dynamic insertion of more lucrative targeted ads, an advantage it has over satellite.)
I generally agree with your points. Specifically:
#1. AT&T doesn't necessarily need fiber throughout their entire footprint but they do need to upgrade homes from slow legacy DSL to speeds fast enough to sustain OTT streaming video plus other internet activity. So that could be fiber-to-the-home, or fiber-to-the-node (formerly branded as "Uverse internet"), or fixed 5G. On their recent quarterly call, AT&T said they only have 800,000 homes left on legacy DSL, down from 4.5 million four years ago. Meanwhile, they are continuing to aggressively expand their fiber-to-the-home network, which is now available to about 8 million locations and is targeted to hit 12.5 million by the middle of 2019.
#2. Yes, I agree about the need for an AT&T-supplied STB for their OTT TV service and AT&T has said they plan to roll that out late this year. (The CEO refers to it as their "home-centric" OTT TV service.) I think it may be marketed/branded as a different service from DTV Now but it will use the same underlying distribution platform. Here's a link to the STB that AT&T submitted to the FCC months ago which may be what they offer customers. Yes, it will be a simple self-install, just plug it in and connect it to your home network/internet via either wifi or ethernet.
DirecTV to Launch Android TV-Based OTT Set-Top Box (EXCLUSIVE)
#3. This isn't really a problem. According to the following report (see chart 5), 89% of Americans in mid-2016 (two years ago) had at least one wired broadband internet provider with download speeds of 25 Mbps or greater available to them. (AT&T recommends a minimum 12 Mbps connection at home for DTV Now users.) 25 Mbps is fast enough to support 2 or 3 simultaneous DTV Now streams at its top HD quality (although in a multi-person household with lots of other folks online at the same time, a higher download speed may be needed). That said, it is true that a significant number of rural Americans do not have a broadband provider available where they live. That's why AT&T has said that satellite TV will shift to being mainly a product targeted at rural dwellers.
https://www.ustelecom.org/sites/default/files/US Broadband Availability Mid-2016 formatted.pdf
#4. 5G connections (whether mobile or fixed home) will certainly provide greater bandwidth for watching video. But today's 4G LTE connections from AT&T and others are already up to the task of allowing mobile viewing of services like DTV Now. Here are AT&T's stated bandwidth requirements for DTV Now:
- 150 Kbps - 2.5 Mbps - Minimum broadband connection speed for Mobile devices
- 2.5 - 7.5 Mbps - Recommended for HD quality
So, given all the above, I'd say AT&T is pretty much ready to begin pushing OTT as their primary TV distribution platform. They just need to finish developing their new streaming platform, which is finishing up beta testing for DTV Now currently.