DirecTV looking at broadband bundles

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DirecTV is still considering ways of offering 15m satellite television customers high-speed internet access, but whether such services are essential and whether technology needs to be owned or leased are “open questions”, said Greg Maffei, chief executive of Liberty Media.

Liberty, controlled by cable industry pioneer John Malone, in December agreed to buy a 38 per cent stake in DirecTV in exchange for its 19 per cent voting stake in News Corp, the media group controlled by Rupert Murdoch.

The deal, which requires regulatory approval, is expected to be completed by July. News Corp shareholders are due to vote on April 3.

Mr Maffei said Liberty’s investments and experience in telecommunications and technology companies, such as satellite broadband provider Wild Blue, allowed the company to “be a good partner” to DirecTV as the satellite group continues to map out its strategy.

Strong competition from cable operators, such as Comcast and Time Warner, offering high-speed internet connections and telephone services, in addition to multi-channel television, has led to some concerns that it will be more difficult for satellite operators to compete.

Mr Maffei said the questions relating to such bundles were important, but there were still a lot of unknowns.

In the meantime, DirecTV would continue to offer bundled products to customers through partnerships with telecoms companies such as Qwest, Verizon and AT&T.

However, in the future, Mr Maffei said, wireless internet access could be more important. “There continue to be new forms of broadband arising. Whether we need to buy or lease and whether we need to have the bundle supertight are open questions,” he said.

Liberty Media said on Wednesday that profits rose at Starz, its content company, and QVC, the home shopping business. The company also announced that it planned to buy back up to $1bn of shares.

Separately, Time Warner Cable, the second-biggest US cable operator, said it was expecting sales and operating profit to grow more than 30 per cent this year.

The forecast comes as the company prepares for its shares to start trading on the New York Stock Exchange on Thursday. About 16 per cent of its shares will be publicly traded, with media group Time Warner retaining the other 84 per cent. Time Warner Cable said on Wednesday its revenue in 2006 was $11.8bn and operating profit was $4.2bn.

Much of the focus for Time Warner Cable this year will be to integrate the cable systems it acquired from Adelphia.

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