DirecTv’s installer network is hidden gem in AT&T deal

by Steve Blum • , , ,

AT&T intends to expand its high speed broadband footprint with wireless service, a goal that’ll be much easier to achieve if its acquisition of DirecTv goes through. There’s a lot of talk about the television side of the deal – and rightly so – but wireless broadband is a core element too, according to AT&T’s announcement

AT&T will use the merger synergies to expand its plans to build and enhance high-speed broadband service to 15 million customer locations, mostly in rural areas where AT&T does not provide high-speed broadband service today, utilizing a combination of technologies including fiber to the premises and fixed wireless local loop capabilities.

If you don’t read it carefully, you might think that 15 million rural homes will get fiber service. That not what it says, though. There’s little chance that AT&T is going to build fiber-to-the-home systems in rural markets, except possibly a few ultra-affluent enclaves.

So fiber in dense urban business districts and “high potential” neighborhoods, otherwise upgraded copper service in urban and suburban markets where work has already begun, and satellite television and wireless broadband elsewhere, particularly in rural communities.

DirecTv has a nationwide network of installers who have three big advantages: 1. they know how to install antennas (which often have the same mounting gear, regardless of whether satellite or terrestrial) and run cable inside (the hardest part of an install), 2. they’re everywhere, even where AT&T doesn’t have much ground presence, and 3. they’re non-union.

AT&T will use its mobile infrastructure as a platform to build fixed broadband systems, so it might be more robust than typical WISP technology, but even assuming so, consumer wireless service is a high-touch business. Having a ubiquitous, low cost army of field techs could bring operating costs down to the point of making the business case for expansion into marginal areas.

The big question, though, is the price points and service levels the business case needs.