AT&T CEO Expects Time Warner Deal to Happen ‘This Year’

Randall Stephenson provides status update on telecom giant’s first-quarter earnings call

AT&T Time Warner
AT&T Time Warner

AT&T reported first-quarter earnings in line with expectations Tuesday afternoon, but all eyes were on the telecom giant’s proposed $85 billion acquisition of Time Warner. On a conference call after the earnings release, AT&T Chairman and CEO Randall Stephenson obliged, providing a status update on the mega-merger.

“On the Time Warner deal, approval is moving along as expected,” Stephenson said on the call. “The European Commission has approved it, the Department of Justice is now reviewing it.”

Because the proposed merger doesn’t involve the transfer of licenses, Stephenson said he doesn’t expect the Federal Communications Commission will find a need to review it all.

“We expect approval this year,” he said.

Stephenson also answered a question about AT&T’s DirecTV satellite business, which has been struggling to keep subscribers along with other traditional pay-TV services as cord-cutting gains in popularity. AT&T has its own internet-based “skinny bundle,” DirecTV Now, which cleared 200,000 subscribers earlier this year — but AT&T declined to provide a current subscriber count along with its quarterly earnings report. Stephenson said DirecTV Now has not taken subscribers away from DirecTV.

“There’s some cannibalization by DirecTV Now but it’s fairly nominal,” Stephenson said.

He said much of the pay-TV subscriber loss is concentrated in areas where AT&T only offers a standalone TV package, but other players offer bundled packages. Earlier in the call, AT&T Chief Financial Officer John Stephens said the company has pulled back on its DirecTV Now marketing to let the service settle in, but to expect a more aggressive posture in the second half of the year.

“It’s still only five months since the DirecTV Now launch, but we like what we see and feel very good about the service and where it’s headed,” Stephens said.