Now that AT&T owns Time Warner, it does not have to negotiate with third parties for the content it provides. AT&T introduced a new unlimited wireless plan which includes its WatchTV streaming service. As the other providers are coming up with new channel bundles, the competition is likely to tighten not only on pricing but on the size and content of these bundles.
The Dallas-based conglomerate’s scale allows it to spread the costs wider among its large customer base that helps to improve profit margins and get better returns on invested capital. Although the AppNexus acquisition will bring in advertising revenues for AT&T, cord-cutting is likely to put pressure on the telecom giant’s pay-TV revenues. However, with its wireless capabilities, Time Warner programming and AppNexus advertising platform all rolling together, it looks like AT&T will not just prevail but see strength going forward.