DIRECTV hikes prices ahead of AT&T merger

DetailsMichelle Clancy | 30 December 2014

DIRECTV is planning to raise the monthly baseline prices for its Entertainment, Xtra, Ultimate, and Premier packages, beginning 5 February 2015. The satcaster, which has hiked prices every year for the last decade, blames higher programming costs. This year, the average price hike is bigger than last year's 3.7%.

The hikes are not insignificant; the increases are by 3.5%, 5.5%, 6%, and 5.4% to $59.99, $79.99, $86.99 and $136.99, respectively. In addition, DirecTV has hiked its per-device fee for connected TV sets and set-tops by $0.50 to $6.50 per month, and its surcharges for regional sports networks by up to $2.14 per month.

The timing is interesting considering that AT&T expects to close its acquisition of DIRECTV in the first half of 2015, provided the FCC opens up its review of the merger. The telco has promised to keep offering DIRECTV's services on a standalone basis at "prices that are the same for all customers" for at least three years following the deal's closing meaning that a price hike now is likely prudent.

Ironically, AT&T has argued the acquisition will lower U-verse content costs by at least 20%, as a result of having more scale.