EchoStar sees initial losses from TV converter
LAS VEGAS (Reuters) - EchoStar Holding Corp (SATS.O) expects to initially lose money on analog digital television converters that it plans to sell for $39.99 starting in May, Chief Executive Charlie Ergen said on Monday.
The company, which was spun off from EchoStar Communications Corp (DISH.O) last month, will sell the TR-40 box to anyone, including subscribers to rival pay TV services. The box helps analog TV sets to receive digital signals ahead of a February 17 deadline for broadcasters to stop transmitting analog signals.
"We'll lose money initially," Ergen, CEO of both EchoStar companies, said on the sidelines of a news conference at the Consumer Electronics Show in Las Vegas. He did not say how much the company would lose on the boxes.
Ergen said he hopes the offering will help generate interest in EchoStar's satellite television services. "You're not going to make an impact by being the same as everybody else," he said.
EchoStar Communication's Dish network trails only DirecTV Group Inc (DTV.O) in the U.S. satellite television market, but both face competition from cable and telephone companies.
AT&T Inc (T.N) has a marketing partnership with EchoStar in some markets, but competes with it in others.
The Dish network had about 13.7 million subscribers at its last count in early November. For the third quarter, EchoStar said it added 110,000 net new subscribers, which was down sharply from 295,000 a year earlier.
Ergen said it was more important than ever for companies to operate smoothly when consumers are concerned about problems in the U.S. economy. He was referring to EchoStar Communications' weak third-quarter growth, which he blamed on the U.S. economic slowdown as well as customer service problems.
"Anytime the economy slows down and growth slows down, those things come to the surface," Ergen told the news conference.
"We need to answer our phones in 30 seconds .... We just don't do that as well as we should," he said. "There's really no excuse for us not being able to do that."
Ergen declined to give an update on whether the company had managed to fix any of these issues since it reported third-quarter results on November 9, saying that some operational problems could be fixed more quickly than others.
The executive also said EchoStar has yet to decide whether to bid in an upcoming auction of wireless airwaves that could be used for mobile Internet services.
"We've applied to the 700 megahertz auction so we're in a position to participate," Ergen said in response to a question.
"We'll look and see what people are doing in the auction, and if it makes sense for us to participate or not," he said. "We haven't decided what we're going to do."
(Editing by Jeffrey Benkoe, Richard Chang)
