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

Chinese Study Claims Heart Diseases Can Be Reduced By Having An Egg A Day

Asteroid mining: Reality or fiction?

3D Printing Used For Life Saving Kidney Transplant In Two Year Old At U.K. NHS

California to require solar panels for new homes by 2020

Blockchain Enables De Beers To Track Diamond From The Miner To The Retailer

Microsoft releases Windows 10’s April 2018 Update

DNA Sequencing Project Proposed For All Complex Life Forms On Earth By An Int’l Team

Facebook may start production of its own microprocessors

Long-Term Alcohol Monitoring Could Be Possible With A New Injectable Chip Developed By U.S. Researchers

Sweden Now Has The First Electrified Road In The World

World Politics

World & Politics

The British government is trying to unblock money to pay off the national debt

Ministerial Visit From India To North Korea Aimed At Strengthening Ties

What countries are the biggest losers of Trump’s Iran decision?

World's Oldest Elected Prime Minister Is Malaysia’s 92 Year Old Mahathir Mohamad

Why Is U.S. Pulling Out Of The Iran Deal A Big Deal For The World

Merkel, Macron, May call on Iran to adhere to the nuclear deal

Arab Region Driven In ‘Wrong Direction’ In Last 10 Years, Say Arab Your: Survey

German doctors demand a tax on sugar