AT&T sells digital entertainment business Vrio

AT&T announced that Grupo Werthein will acquire AT&T’s Vrio business unit, a digital entertainment services company with 10.3 million subscribers across 11 countries in Latin America and the Caribbean.
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Vrio provides live and on-demand video services via DIRECTV Latin America, SKY Brasil and DIRECTV GO.

Vrio’s infrastructure includes satellites and broadcast centers that carry 4K video formats. Vrio’s broadband operations, along with other investments, including Torneos y Competencias in Argentina and WIN Sports in Colombia, will transfer to Grupo Werthein at close.

AT&T’s Vrio revenues were $749 million, stable year over year reflecting pandemic pressures. Vrio posted operating loss of $25 million compared to ($36) million in the year-ago quarter, with operating income margin of (3.3) percent, compared to (4.8) percent in the prior year.

Vrio subscriber net losses of 239,000 were driven by economic pressures and pandemic restrictions in Brazil, and pandemic impacts in other parts of the region and were partly offset by growth in over-the-top subscribers.

“This transaction will further allow us to sharpen our focus on investing in connectivity for customers,” said Lori Lee – CEO AT&T Latin America. “We remain committed to Latin America through our wireless business in Mexico and services for multinational corporations 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 at June 30, 2021 and reported the asset group at fair value less cost to sell, which resulted in an impairment of $4.6 billion including $2.1 billion related to accumulated foreign currency translation adjustments.  AT&T plans to announce second-quarter 2021 results on Thursday, July 22, 2021.