[Steve Mehs]

What does the future hold for some of Hughes Electronics' lackluster businesses?

Hughes President and CEO Jack Shaw said this week that the company is thinking about the fate of its underperforming units, including DirecTV Latin America and DSL provider DirecTV Broadband. He said any final decision consdiering their future could be made at about the same time the company is expected to close its proposed $26 billion merger with EchoStar, which should take place by the end of the year.

During the second quarter, DirecTV DSL added about 20,000 net customers, and as of June 30, had about 133,000 residential customers. The DSL service had second quarter revenues of $18 million, compared to $7 million for second quarter 2001. DirecTV DSL also posted negative EBITDA of $29 million for the three-month period, compared t negative $41 million in the same period last year.

The DirecTV service in Latin America, plagued by economic and political uncertainty throughout the region, added 27,000 net subscribers during the second quarter, bringing the total customer count to 1.669 million.

William Kidd, satellite analyst with Lehman Brothers, said DirecTV Latin America may consider combining with Sky Latin America, its South American satellite TV rival backed by News Corp. For the near-term, however, DirecTV Latin America won't aggressively grow its subscriber base in the weak regional economy, and will instead focus on replacing lower-quality customers with higher-quality subscribers.

From SkyReport (Used with Permission)

 

[Guest]

Basically, local cable in those places is much cheaper than DirecTV and some of them (illegally) give customers premium channels for free. DirecTV can't compete with that.

 

[Steve Mehs]

Hi Raj, glad you stopped in and Welcome to DBSTalk.Com :hi:

I havent been at AVS much lately, been busy over here.

 

[Guest]

Originally posted by Steve Mehs
Hi Raj, glad you stopped in and Welcome to DBSTalk.Com :hi:

I havent been at AVS much lately, been busy over here.

Thanks Steve. I haven't gotten around to registering yet, but I will soon. Great forums btw.

To elaborate on my previous post, basically I used to live in Trinidad and Tobago (in the caribbean). There was DirecTV there, and there was cable there too. DirecTV Latin America was the provider for DirecTV.

For approximately $30 (US dollars) you could get cable with almost 100 channels and HBO, Cinemax, Starz, Showtime. These networks were US feeds and all in English. The premium channels you didn't have to pay for. This has been a sort of grey area because the cable companies were just distributing premiums without collecting subscription fees for the programming providers (HBO, cinemax etc).

The signals sent over the cable were also unscrambled (in the clear), so alot of people used to share a cable connection. Believe it or not, in a neighborhood, one person would take a cable connection and share it amongst their neighbors and split the bill. The cable companies have recently cracked down on signal sharing, and they have put scrambling in the signal and began giving users cable boxes. They also raised the rates.

DirecTV on the other hand, cost $50-$60 per month (US dollars), and you had to pay extra for your premium channels. Alot of the channels were in Spanish, and you couldn't share the signal for free. So naturally alot of people went with cable. You also had to purchase equipment, and the cost was prohibitive to most locals. Initially, it was approximately US$400 for a dish and receiver and installation. The price has come down a bit, and you can also lease your equipment. But the exchange rate is approx 6:1 so it would have been $2400 of TT currency, which, for many, is more than half their monthly salary.

DirecTV gained popularity in rural areas because the TV reception in rural areas was really bad, and cable did not go to rural areas. But for those in areas with cable, very few people took DirecTV. I suspect that more are going with DirecTV now as cable raised their rates.

Now here in the USA, it's a different picture. Cable companies are more strict about signal security, and DirecTV's cost is about the same, if not less than cable in many areas. You also have a choice in DBS providers (well, probably not much longer *sigh*). So it's quite a different picture.

I have no doubt that the same sort of situation that I described above exists in other DTVLA territory.