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When EchoStar unveiled plans to have its DISH Network pair with WildBlue's satellite broadband to offer high speed internet access, the company hoped the news would appease not only rural subscribers, but urban Streeters as well. And although the new service will offer customers another reliable source for broadband internet, analysts are saying the deal isn't as sweet as perceived.

According to Oppenheimer's Thomas W. Eagan, it will become increasingly difficult for DISH to sustain its historical subscriber growth rate, given all the changes that have occurred in the competitive landscape. The analyst said the WildBlue move would prove ineffective in this new market, one influenced by the sale of Adelphia cable systems, the continued rollout of VoIP (especially at Comcast), and slowing subscriber growth of the AT&T/DISH partnership.

Eagan said he is "skeptical" that the new DISH/WildBlue announcement will result in significant lower video subscriber churn, especially in light of the fact that DISH had affiliated with the rural broadband company years ago but canceled it after lackluster sales.

Also, the analyst said, DIRECTV launched a partnership with WB earlier this but haven't been able to even start offering the service several months down the road. With the WildBlue service being attractive to the truly rural household market, coupled with the speed/price value being "significantly inferior to cable or RBOC DSL," Eagan said the firm would remain neutral on EchoStar's and that a deal with WildBlue "provides limited upside" to the company.

www.SkyReport.com - used with permission
 
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