Dallas-based AT&T is exploring a sale of the DirecTV satellite business that it bought in 2015, according to a report by The Wall Street Journal.

Among its options, it may spin the satellite TV unit into a separate company or sell it to a rival, such as Dish Network, according to the report, which cites unnamed sources.

A source familiar with the matter told The Dallas Morning News there are no discussions between Dish and AT&T because of regulatory concerns. Federal regulators stopped a deal between the two companies in 2002, citing consumer harm.

AT&T declined to comment.

The report about a potential DirecTV sale comes about a week after an activist investor publicly questioned AT&T's business strategy and succession plan. In a 23-page letter, New York-based hedge fund Elliott Management criticized decisions by company management and called for the divestment of "any assets that do not have a clear, strategic rationale for being part of AT&T." One of those, it said, is DirecTV.

Elliott holds a $3.2 billion stake, or 1%, in AT&T. It said its recommendations would drive AT&T's stock price above $60 by the end of 2021.

AT&T paid $67 billion, including debt, for DirecTV four years ago. With it, AT&T became the largest pay-TV provider in the country. The move also signaled the company's growing interest in the world of entertainment.

But Elliott said in its letter that the pricey acquisition was a mistake that has had "damaging results." AT&T closed the deal just as customers were shifting away from traditional cable and satellite TV subscriptions, it said.

AT&T has struggled with a decline of pay-TV subscribers as many shift to lower-cost streaming services. In the first half of this year, AT&T lost more than 1.3 million traditional TV subscribers, which includes DirecTV and U-verse. It has sought to stem that decline with its live TV streaming service, AT&T TV Now, but that, too, is losing subscribers.

AT&T's troubles have been compounded as it phases out TV promotions and faces contract disputes. Last week, AT&T chief financial officer John Stephens said the company expects to report a third quarter loss of as many as 350,000 pay TV customers because of the CBS blackout and the end of promotional pricing.

On Tuesday, AT&T CEO Randall Stephenson defended the company's shift from a legacy telecom company to a modern media company at a Goldman Sachs investor conference. In his first public remarks about Elliott, he said AT&T has gathered ingredients it needs to win customers who are streaming more video and demanding greater connectivity. A key piece of that, he said, is the deep library of content AT&T now owns. It acquired Time Warner, now called WarnerMedia, in 2018.

But Stephenson said he and the board will listen to Elliott's ideas, too.

"These are smart guys and they put a lot of ideas into the paper that we need to sit down [and] engage with them on," he said. "And at the end of the day, we're going to evaluate it and talk to them and see what makes sense for all of our shareholders."