AT&T Buyout of Echostar "Less Likely"

So maybe AT&T (T) is getting serious about this whole video thing.

Credit Suisse’s Bryan Kraft Friday morning cut his rating on Echostar (DISH) to Underperform from Neutral, based on the theory that it has become less likely that AT&T will make a bid for the Dish Network parent. “There are signs that AT&T’s U-Verse TV platform is becoming more stable and may be at or near the point where it is ready to scale,” Kraft wrote.

Specifically, AT&T announced that it has launched in Dallas-Forth Worth with approximately 200,000 home initially. This is in addition to the Milwaukee and Racine, Wisconsin markets launched last week. Later this month AT&T is scheduled to launch in Kansas City. Management made it clear that they had slowed their U-Verse launches in order to fix these issues and would resume the rollout once that had a satisfactory product, which it appears they are now doing.

And the punchline is this: “If U-Verse is in fact scaling, then we believe it is less likely that AT&T will acquire DISH.”

Kraft advises investors to unwind the long DISH/short DirecTV (DTV) pair trade he had recommended in December.

Friday morning, Echostar was down $1.15 to $43.25; DirecTV was up 13 cents at $22.83; AT&T was up 12 cents at $36.63.