AT&T sells digital entertainment business Vrio

AT&T has announced that Grupo Werthein will acquire the Vrio business unit from AT&T, a digital entertainment services company with 10.3 million subscribers in 11 countries in Latin America and the Caribbean.

Vrio provides live and on-demand video services through DIRECTV Latin America, SKY Brasil and DIRECTV GO.

Vrio’s infrastructure includes satellites and broadcast centers that carry 4K video formats. Vrio’s broadband business, along with other investments including Torneos y Competencias in Argentina and WIN Sports in Colombia, will be transferred to Grupo Werthein on closing.

AT & T’s Vrio revenue was $ 749 million, stable year-over-year, reflecting pandemic pressures. Vrio recorded an operating loss of $ 25 million versus $ (36) million in the previous year quarter, with an operating profit margin of (3.3) percent, versus (4.8 ) percent the previous year.

The net loss of Vrio subscribers of 239,000 is due to economic pressures and pandemic restrictions in Brazil, as well as the impacts of the pandemic in other parts of the region and has been partially offset by the growth in the number of over-the-top subscribers.

“This transaction will allow us to increase our focus on investing in customer connectivity,” said Lori Lee, CEO of AT&T Latin America. “We remain committed to Latin America through our wireless business in Mexico and our services for multinational companies operating in the region. “

AT&T and Grupo Werthein will have transition services agreements in place under which AT&T will provide certain services, such as billing, infrastructure and software support, to Grupo Werthein for one to three years after the transaction closes.

AT&T classified Vrio as held for sale as at June 30, 2021 and presented the group of assets at fair value less costs to sell, resulting in an impairment of $ 4.6 billion, of which 2, $ 1 billion related to currency translation adjustments. AT&T plans to report its second quarter 2021 results on Thursday, July 22, 2021.

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