The broader implications of what AT&T is doing naturally extend far beyond the former Ma Bell’s domestic market. In the words of Wired, “AT&T is buying Time Warner because the future is Google.”
In other words, Google, Facebook, Netflix and Amazon are not only the new media companies but are also now investing in and providing telecoms and Internet services. Many telecoms operators, meanwhile, are still trying to figure out their content and media strategies.
This was particularly highlighted at the recent IBC broadcasting event in Amsterdam, where telcos such as Deutsche Telekom, KPN and Vodafone indicated that they are still sitting on the fence when it comes to becoming content owners or producers themselves.
Indeed, Peter Kerckhoff, who straddles the two worlds of telecoms and media in his role as VP of content at Deutsche Telekom, noted that the German telco is happy in its role as content aggregator -- at least for now. However, Kerckhoff like others will no doubt be watching the unfolding of the AT&T deal with heightened interest.
What the telcos do have, of course, are mobile distribution networks, and dumb pipe or no dump pipe, mobile and wireless distribution support is increasingly important in this world of smartphones, tablets and other connected devices. Consumers no longer want to sit at home and watch videos and TV; they want to watch whatever they want, wherever they go, and at any time.
While media outlets have been analysing every angle of the AT&T deal in minute detail, if you have been paying attention to other industry news you will have noticed the glut of announcements regarding mobile network evolution this week. To pick just a few, Vodafone has been experimenting with massive MIMO; TIM claimed to have reached 500 Mbps speeds on its 4.5G network; T-Mobile Austria achieved speeds of 2 Gbps in an LTE Advanced Pro trial; and both Deutsche Telekom and Vodafone are pressing ahead with NB-IoT.
Operators need content and services for differentiation and to add value; of that there is no doubt. Meanwhile, big content providers such as Netflix and Time Warner have been able to form deals with cable providers and telcos to ensure distribution.
The future mobile distribution of content, however, will need the likes of massive MIMO, LTE-A Pro, carrier aggregation and ultimately 5G to support the changing needs and growing demands of users. So while AT&T may need and want Time Warner’s content, the telco’s mobile network will function as a highly attractive channel to market for the media company -- assuming the deal gets approved, of course.--Anne