AT&T expects cost reduction synergies to exceed a...

AT&T expects cost reduction synergies to exceed a $1.6 billion annually by three years after closing as a result of an approval of its takeover of DirecTV. After the completion of the transaction, its U-verse content costs are expected to be reduced by about 20 percent or more “as compared with our forecasted standalone content costs,” it said in its Form 8-K (http://1.usa.gov/1kBdzl4). With this deal, the company can offer a better bundling opportunity by allowing AT&T to bundle all its Project VIP footprint with video and broadband at “24 million more locations than originally planned,” it said. The economics of the transaction will allow the combined company “to upgrade 2 million additional locations to high speed broadband with Gigapower FTTP (fiber to the premise) and expand our high speed broadband footprint to an additional 13 million locations,” it said. AT&T also said it expects fixed wireless broadband to provide speeds of up to 10-15 Mbps during peak periods “with even higher maximum speeds during off peak times.” The company expects its Project VIP network plan to bring fiber to more than 400,000 new business location by the end of Q2 2014 (CD June 4 p13).