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EchoStar reports 63 percent drop in sub adds in Q3

Mon, 11/12/2007 - 8:28am
Traci Patterson

EchoStar Communications Corp. reported a 62.7 percent decrease in net subscriber additions in the third quarter - the company added 110,000 new subscribers, compared with the 295,000 gained in the year-ago quarter.

The satellite provider ended the quarter with 13.7 million subscribers - an increase of 7.4 percent compared with the 12.8 million subscribers the company counted a year ago.

EchoStar said its subscriber additions continue to be affected by increased competition, adverse economic conditions and operational inefficiencies. The decrease primarily resulted from an increase in subscriber churn rate and churn on a larger subscriber base, EchoStar said in its Form 10-Q. The percentage of monthly subscriber churn for the quarter was 1.94 percent, compared with 1.76 percent for the same period last year.

“Our gross new subscribers, our net new subscriber additions and our entire subscriber base are negatively impacted when existing and new competitors offer attractive alternatives, including, among other things, video services bundled with broadband and other telecommunications services, better-priced or more-attractive programming packages, and more compelling consumer electronic products and services, including DVRs, video-on-demand services, receivers with multiple tuners, HD programming, and HD and standard-definition local channels,” EchoStar’s 10-Q stated.

The company added, “We also expect to face increasing competition from content and other providers who distribute video services directly to consumers over the Internet.”

AT&T and other telcos offer Dish Network programming bundled with broadband, telephony and other services. In May, AT&T stated that it intends to select a single satellite TV provider for its entire territory by the end of the year.

“Our net new subscriber additions and certain of our other key operating metrics could be adversely affected if AT&T or other telecommunication providers de-emphasize or discontinue selling our services and we are not able to develop comparable alternative distribution channels,” the company’s 10-Q said.

EchoStar’s net income for the quarter was $199.7 million, up from $139.6 million in the year-ago quarter. Total revenues for the quarter were $2.8 billion, a 12.9 percent increase year-over-year.

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