AT&T (NYSE: T) took on Netflix (NASDAQ: NFLX) and other video streaming rivals with the launch of its HBO Max service last year. But any comparison between Netflix and AT&T requires a look into how AT&T's streaming service fits into its larger telecom business.
T-Mobile (NASDAQ: TMUS) spent nearly $10 billion on relatively few spectrum licenses in the FCC's C-band spectrum auction that concluded last month. Verizon pledged $45.5 billion for the mid-band spectrum licenses and AT&T agreed to $23.4 billion in spectrum licensing. Without getting too deep into the technicalities, T-Mobile's spectrum holdings in the mid-2010s were well-positioned for major metro areas but not as great in rural areas.
AT&T (NYSE: T) took a big step toward cutting the cord on its pay-TV business. AT&T will retain 70% ownership of the new company, but it will get a much-needed cash infusion as part of the deal, valuing the business at $16.25 billion. It's not an ideal end result from AT&T's $67 billion DIRECTV acquisition from 2014, but it's necessary for AT&T to move forward.