Report: AT&T Explores Selling Off DirecTV

AT&T Inc. is exploring parting with its DirecTV unit, reports The Wall Street Journal citing people familiar with the matter, a sharp reversal from Chief Executive Randall Stephenson’s strategy to make the $49 billion bet on the satellite provider a key piece of the phone giant’s future.

The telecom giant has considered various options, including a spinoff of DirecTV into a separate public company and a combination of DirecTV’s assets with Dish Network Corp. , its satellite-TV rival, the people said.

AT&T may ultimately decide to keep DirecTV in the fold. Despite the satellite service’s struggles, as consumers drop their TV connections, it still contributes a sizable volume of cash flow and customer accounts to its parent.

AT&T acquired DirecTV in 2015 for $49 billion. The company’s shrinking satellite business is under a microscope after activist investor Elliott Management Corp. disclosed a $3.2 billion stake in AT&T last week and released a report pushing for strategic changes. Elliott has told investors that AT&T should unload DirecTV, The Wall Street Journal has previously reported.

There could be regulatory hurdles to any deal with Dish, which has about 12 million subscribers.