The slimdown continues at AT&T. Late yesterday, Reuters reported that AT&T would be selling Vrio, the holding company that operates DIRECTV Latin America, to Grupo Werthein. This of course follows the company’s decision to spin off its US DIRECTV operation and WarnerMedia, the content powerhouse behind HBOMax and other channels.
Vrio?
This move isn’t unexpected. Back in 2018, AT&T formed Vrio as a holding company to operate all its Latin America satellite operations. A lot of industry insiders viewed this as a precursor to AT&T eventually selling that operation. Because AT&T is considered a utility in the US, there were regulatory issues all along, and the company didn’t seem interested in moving outside of the United States anyway.
Oh how the mighty have fallen
Longtime DIRECTV fans may remember the time, not long ago, when Latin America was the crown jewel of the DIRECTV portfolio. As much as I loved to make fun of DIRECTV’s Bruce Churchill for the funny way he pronounced “Panamericana,” there was never any doubt that the company saw great potential in South America.
In the early 2010s, South America was booming while the US economy shrank. Along with that extra income came a voracious appetite for television content. That in turn drove massive growth in satellite TV, and DIRECTV was there to capitalize. Unfortunately, South American governments were unstable and continue to be. It’s been hard for foreign companies to do business there because of swings in exchange rates and even outright bans on taking money out of the country. Venezuela and Brazil, once two of the most promising markets for satellite TV, suffered the most.
How does this impact “New DIRECTV?”
The smart money is on AT&T completing its spinoff of the US DIRECTV operation in the next two months. When the deal for DIRECTV Latin America concludes, that means there will be absolutely no tie between DIRECTV US and DIRECTV Latin America.
For all of their existence, the two operations have shared infrastructure and equipment designs. It’s not clear if that will continue. Of course, the hardware used by both companies has been supplied by outside manufacturers like Technicolor, Zinwell, and Unitron for decades. Both companies are welcome to make their own contracts for equipment. However, when it comes to software, things get a little fuzzier. It’s not clear to me, as an outsider, honestly. I don’t know who will own the source code that runs those receivers and DVRs. Maybe it will be shared. It’s even possible that DIRECTV Latin America’s new owners will partner with New DIRECTV. They’re experts in software design. The new owners of DIRECTV Latin America may use them for software support for some time to come.
Where’s AT&T in all this?
AT&T will have a stake in both “New DIRECTV” and “Warner Bros. Discovery,” the two new companies that are spinoffs from the current AT&T umbrella. They won’t have any stake in DIRECTV Latin America at all. But certainly all this dealing will give AT&T the cash it needs to recover from its spending spree of the last ten years. It will also allow them to focus more on providing telecommunications services, which has always been its core focus.
We at Solid Signal have never been able to offer DIRECTV Latin America products to you. You see, they’re illegal for sale in the US. Still, we’ve often supported marine customers who operate both US and foreign satellite TV equipment. We’ll continue to offer AT&T products and services after DIRECTV is spun off, and of course we’ll keep being the nation’s best source for DIRECTV parts and accessories.
