Daily Management Review

AT&T Thinks Of Selling Its ‘Digital Life’ Unit Of Home Security Under ‘Debt Load’


08/24/2017


Waning revenue and the pressure of paying debt sets AT&T on the road to divestiture.



The AT&T Inc. is considering to sell its “Digital Life home security business” for paying its debt after the “planned $85.4 billion acquisition of Time Warner Inc”. If the sale takes place, AT&T would move on a “reversal” gear for in the year of 2013, the company had launched its “Digital Life” in the “U.S. home security market”. With this service customers with the help of cameras and monitors could keep an eye on “their homes and pets on their phones”.
 
However, in 2016, Digital Life’s revenue contributed only “a tiny fraction” to AT&T’s total revenue income. While, the sources estimates that Digital Life should have “between 400,000 and 500,000 customers” potentially could be sold nearly at “$1 billion”.
 
Although, with the sale amount AT&T will not be able to pay off its total debt of “$143.7 billion” as on 30th of June, but this may set the company on the road to “more divestitures”, think the sources who chose to remain anonymous. In the words of Craig Moffett, an analyst at “MoffettNathanson research”:
“AT&T will carry an incredible debt load (after the Time Warner deal closes), which is a risky proposition for a company with declining revenues. They will almost certainly have to find assets to sell to appease the bond rating agencies.”
 
The acquisition of Time Warner is likely to complete by the “end of the year”, at present the deal is under “antitrust review by the U.S. Department of Justice”. The reach of Digital Life extends to as many as eighty markets in the U.S. including New York and Chicago.
 
However, it failed to match the “scale of U.S. cable company Comcast Corp's (CMCSA.O) rival service”, whereby the latter launched “its Xfinity Home service in 2012”. According to Reuters:
“Cable operators turned to home security services a few years ago for a new revenue stream and as a way to rebuild margins whittled away by swelling programming costs”.
 
In fact, sources think that “home security companies” as well as buyout firms are taking interest in the above mentioned unit AT&T. In fact, the “home security unit of DirecTV” at AT&T, LifeShield, has been bought over by “Hawk Capital Partners” sometimes last month, although the amount has not been disclosed yet.
 
 
References:
www.reuters.com







Science & Technology

Germany Introduces The First Ever Train To Run On 100% Hydrogen

Germany Plans On Cyber Security Research To End Reliance On U.S. Tech

Fuchsia will kill Android by 2023: Top 5 facts about the new OS

New Study Finds Goats Interact More With Happy People

More than 32 thousand "smart" houses under threat of hacker attack

Internet addiction and children: Global plague

Apple takes up to develop Apple Watch for health monitoring

Hyperloop is growing in Europe

Analysts: US gamers prefer mobile games

Google Assistant Winner Of Head-To-Head Test Of Digital Assistants, Beats Siri And Alexa

World Politics

World & Politics

Ex-Brexit Minister Said A ‘Reset’ Is Needed For Brexit Talks

10 countries with the best healthcare systems

Foreign Experts To Be Allowed By North Korea For Permanent Destruction Of Missile Sites

Ireland recovers €14.3 billion from Apple

Is China going to cancel its birth limit policy?

The US is ready to start negotiations with China

US and China start 5G race

Is Czech Republic posing a threat to the European Union?