Spain’s Telefonica could be one of several potential suitors for DirecTV’s Latin American satellite assets, according to a Reuters report.
Reuters, citing unnamed sources, said Telefonica could pay as much as $10 billion for DirecTV’s Latin American business, which had been its primary growth engine leading up to its $48.5 billion merger with AT&T last year. Foreign currency declines have squeezed profits at the operations over the years. And AT&T has said that it would be willing to sell the Latin American business for the right price.
AT&T is the largest satellite TV operator in Central and Latin America with about 19 million customers. Other pay TV providers and telephone companies could express interest in individual markets, like Liberty Global or other regional carriers. AT&T, according to Reuters, has not decided if it wants to explore a deal with Telefonica or any other company.
DirecTV and AT&T officials did not immediately respond to a request for comment.
Once one of DirecTV’s bright spots, the Latin American business has fallen on hard times as currency rates in Brazil (where it is a 93% owner of Sky Brasil) have declined and overall economies in the region have suffered. At the UBS Global Media & Entertainment Conference in December, AT&T CEO Randall Stephenson said, according to a transcript of the event by web site seekingalpha.com, the DirecTV Latin American operations were well-run, but the currency issues and the fact they are one-product operations are “not terribly exciting to us.”
He added that if another company expressed interest in buying the Latin American assets AT&T would look at it, but that the company was not in a rush to sell.