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DirecTV May End Up More Burden for AT&T

In the annals of big acquisitions that look doomed from the start, Microsoft’s purchase of Nokia and Hewlett-Packard’s purchase of Compaq Computer may be hard to beat. At least, until, AT&T completed its $63 billion purchase of DirecTV last month.

This is a case of a company whose business is growing very slowly buying a company whose business is in almost certain decline—and while DirecTV could give AT&T a short term financial boost, it could quickly end up being a drag.

The deal is being watched by a lot of different companies for how it affects the development of video on mobile, satellite TV’s competitive dynamics with cable and the impact on competition in wireless.

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If nothing else, AT&T’s willingness to strike the deal is a reminder of how tough conditions in the wireless industry are becoming