EchoStar's Ergen Fires Back
The satcaster chief tries to explain slow sub growth; also reveals new satellite launches for high-def.
By Swanni
His list included the housing slump and more competition from cable and satellite operators. But he added that one of the causes can be found in the mirror.
"We haven't really executed very well operationally during the last six months," he told analysts yesterday in an investors call. "I am looking forward to spending more time in the operations side so I understand it better."
EchoStar on Friday revealed that it added 111,000 net new subscribers in the third quarter, compared to 295,000 in last year's third quarter. The company's stock dropped nearly 16 percent yesterday on the news.
In contrast, DIRECTV added 240,000 new subscribers in the third quarter. DIRECTV began its high-def expansion in the third quarter, which analysts yesterday said likely contributed to EchoStar's subscriber slow down.
In response, Ergen yesterday said his company next year will launch three new satellites for high-def, particularly for local HD services.
While EchoStar has aggressively attempted to keep pace with DIRECTV's HD expansion (which now stands at more than 70 HD channels), it has fewer markets with local high-def service.
EchoStar is also battling a customer turnover problem, known as the churn rate. The company's third quarter churn rate was 1.94 percent, compared with 1.76 percent in last year's third quarter.
Ergen said the churn rate is more evidence that the company needs to do a better job operationally.
He added that DIRECTV is doing a better job of "branding." a point also made this month by Comcast executives in explaining why DIRECTV is perceived to be the HD leader.
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