Showing posts with label EchoStar. Show all posts
Showing posts with label EchoStar. Show all posts

Wednesday, January 2, 2008

EchoStar, Dish Now Separated


EchoStar has completed the spin-off of its set-top box business into a new a company called EchoStar Holding Corp. The parent company, which now consists primarily of its satellite TV broadcasting business, will change its name to DISH Network Corp., and keep DISH as it stock symbol.

The transaction makes Dish a pure-play video entertainment provider, and arguably a cleaner asset for an acquirer or merger partner. There has been much speculation about an at&t purchase, but that seems unlikely given at&t's recent decisions about its stock buybacks, acceleration of its U-verse deployment and dividend increases.

The earlier proposed merger of Dish with DirecTV didn't pass regulatory muster, in part because the market was defined as "satellite TV" rather than multichannel video entertainment. At some point, as telcos gain more video market share, that argument might not be so compelling, and Dish and DirecTV might be allowed to merge.

Given that the consumer market increasingly is dominated by triple play, dual play and quadruple play providers, and where each of the services markets increasingly are saturated, regulators might take a fresh look at allowing the two satellite providers to merge.

The Dish Networks separation from the the EchoStar set-top manufacturing operations will help.

Thursday, December 13, 2007

No EchoStar Purchase for at&t


at&t appears to have decided not to buy EchoStar to jumpstart its TV business, as it has boosted its dividend and launched a stock buyback program.

In total, at&t might spend roughly $17 billion in 2008 on dividends and buybacks, consuming most or all of the cash its businesses are likely to generate, leaving little to finance a purchase of EchoStar.

at&t also plans to expand U-Verse to cover 30 million households by 2010 in the 22 states where AT&T is the main local-phone company, up from an earlier target of 18 million households.

Broadband access strategy might have played a role in the thinking as well. By speeding its TV capabilities, at&t automatically creates a better network for high-speed access as well.

Wednesday, December 12, 2007

at&t to Drop DirecTV


at&t will stop offering DirecTV services to its customers toward the end of the first quarter. The not-unexpected move came as at&t found itself reselling both DirecTV and Dish Network services as a result of its acquisition of BellSouth, which had been a DirecTV partner. In its own territory, at&t has been partnering with Dish Network.

The Dish Network contract itself expires at the end of 2008, but at&t's longer business relationship with EchoStar, which offers the Dish Network service, probably is decisive.
DirecTV has to have anticipated the decision and has to be expected to roll out new channel and direct sales efforts early next year, to compensate for the loss of sales momentum from at&t.

It will have a lot of work to do. By some estimates, at&t accounted for an estimated 15.2 percent of DirecTV's gross additions but 58 percent of net subscriber growth. And though DirecTV probably will end 2007 with strong subscriber growth at the same level it saw in 2006, 2008 obviously will be more challenging.

Tuesday, December 11, 2007

Cable Squeezed on Both Ends

Most observers expect telco-delivered video to gradually take market share from cable operators, though modestly over the next couple of years. Most observers also think satellite-delivered services have crested, and will be lucky to hold onto their current market shares.

But one suspects there will be more change, longer term, than most observers now expect. For starters, video demand itself could shift to other IP formats, including at least some forms of Web video. So far, there isn't all that much evidence of shift. Consumers haven't embraced any of the devices and services that port video over to TV screens, though there continues to be evidence of a lessening of interest in linear television on the part of younger consumers.

Nearer term, satellite providers remain aggressive about high-definition TV services and pricing, and most consumers seem pleased with their satellite service.

And as compelling as many consumers find triple-play or quadruple-play services, not all buyers will find the pricing the most-compelling attraction. Some services, networks or suppliers are going to be picked as "best of breed" by some portion of the market, despite the fact that a bundle can be purchased from two providers in a market.

That will continue to put some incremental pressure on cable providers, who are using bundling, as telcos are, to lock in and protect the current customer base.

Wednesday, December 5, 2007

700-MHz Auction: EchoStar to Bid; DirecTV Won't

EchoStar Communications will bid for wireless spectrum in the Federal Communications Commission's auction of cho8ice 700-MHz spectrum on Jan. 24. DirecTV won't be bidding. Though the opening bids are set at $4.6 billion, the final price could range between $10 billion and $15 billion, some observers suggest, making an EchoStar win an unlikely event.

The fact that both at&t and EchoStar are bidding in the auction prohibits both of them from discussing a potential merger, so it isn't clear where the rumored at&t purchase of EchoStar might stand. The only thing that is certain is that any such talks must be on hold at the moment.

Wednesday, November 28, 2007

European Commission, FCC Disagree on Competition

As U.S. competitive local exchange carriers and cable companies await key decisions from the Federal Communications Commission, the quantitative tests of "effective competition" are key. And on that score the FCC and the European Commission do not see eye-to-eye. In the video arena, the FCC targets the 30-percent market capture level as denoting "effective competition." In the voice services area the test seems to be 20-percent share loss by incumbents. The EC doesn't even think 50-percent loss of market share by incumbents is sufficient.

The disparities in thinking about what marks "effective" levels of competition leaves at least some room for new thinking on what measures might be required to stimulate even more robust levels of competition. In mass markets, 30 percent quite often is the share held by the market leader.

Tuesday, October 16, 2007

Deathstar!


Scott Moritz at TheStreet.com says at&t is gearing up to buy EchoStar fast. The logic is unassailable. at&t wants to get big in entertainment video. It will take a long time to get its entire network revamped to do so. Buying EchoStar puts at&t right into the big leagues with more than 13.6 million subscribers. Competitor DirecTV has about 16.2 million subscribers. So by acquiring EchoStar, at&t immediately vaults into a position where it serves more than 45 percent of the U.S. satellite-delivered multichannel TV market.

Wednesday, August 15, 2007

DirecTV Adds Broadband Over Powerline


DirecTV will wholesale broadband over powerline broadband access services from Current Group no later than the beginning of 2008. The move gives DirecTV the ability to create a triple play bundle of voice, video and high-speed data access in the Dallas/Fort Worth area, reaching 1.8 million homes and businesses over the next several years.

The move shows the necessity of providing a triple play offering in the mass market, whether one approaches that market from the legacy voice or legacy entertainment video business. Both DirecTV and EchoStar have been weighing their terrestrial options for some time, though both have marketing deals with the leading incumbent telephone companies as well.

DirecTV might have additional concern about those relationships since at&t bought BellSouth, which had been a DirecTV partner. It isn't clear yet whether EchoStar or DirecTV will continue to be at&t's partner in the future, but EchoStar's longer history with at&t (formerly SBC) should carry weight.

Interesting bit of trivia: The just-launched Hughes Network Systems Spaceway satellite was originally supposed to be the third bird in the fleet of IP-enabled spot beam satellites. But when DirecTV was sold off to News Corp. by the holding company that still owns HNS, the first two birds went to DirecTV.

Perhaps sadly, those two birds are used for conventional TV broadcasting rather than the mesh networking applications the satellites originally were designed to support. Linear TV, including the high-definition sort, obviously is the foundation for businesses consumers consider important.

For some of us, though, broadband Internet access is the most important application, if one could only choose a single service remain available (and that includes landline voice, mobile phone, television and fax). The spot beam and on-board router capabilities of the first two of three "Spaceway" birds wound up in the dustbin.

I don't know that the owners of those two birds would have made more money, or garnered more strategic advantage, if all three Spaceway satellites could have been used for their original intended purpose. I will say that given a choice between devoting scarce spectrum to television, when it can be used for communications (including IP and Web applications), seems like a suboptimal choice.

That said, there's little question but that DirecTV has used the capacity provided by those two former "Spaceway" satellites to shore up its competitive position in the high-definition TV area, compared to its cable competitors. "Highest and best use," I believe property assessors call it.

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