UPDATE 1-Satellite TV operator DISH freezes pricing to '09

(Adds details on pricing, background, share fall)

By Yinka Adegoke

NEW YORK, Jan 7 (Reuters) - Echostar Communications Corp (DISH.O) said on Monday it will freeze prices for its most popular satellite television packages until 2009 as competition sharpens in the slowing U.S. economy, sending its shares down more than 4 percent.

The owner of the DISH Network said it is also offering three months free programming to new customers and will waive activation fees.

The move comes as stronger concerns over a U.S. recession prompt investors to question where consumers will cut their home spending on goods and services.

The concerns have intensified competition for pay-TV customers among satellite television operators, cable TV companies and phone companies that have launched nascent video services.

EchoStar has traditionally marketed its services to lower income households as well as to the higher end, while larger satellite rival DIRECTV Group (DTV.O) has more recently focused on higher income households by tightening credit requirements for new customers.

Some analysts believe this is one of the reasons EchoStar has seen a sharper slowdown in subscriber growth as economic pressures first begin to be felt at the lower end of market.

EchoStar said it will freeze the starting price of DishDVR Advantage packages at $39.99 a month until February 2009.

"With the lowest all-digital price in America ... DISH Network is always looking out for our customers when it comes to quality, innovation and value," DISH Chief Marketing Officer Jessica Insalaco said in a statement.

The move comes after EchoStar Chief Executive Charlie Ergen told analysts in November that the weaker U.S. housing market had made the pay-TV market more competitive for all players. "There's a backdrop of fewer housing starts so there are fewer customers to go round," he said at the time.

New York-based Cablevision Systems Corp (CVC.N) said in October it will raise the price of its average video package by 4.7 percent due to increases in programming costs.

EchoStar shares fell $1.43 to $32.05 on Nasdaq in midday trading. In contrast, DirecTV shares were up 12 cents at $21.70.

(Additional reporting by Michele Gershberg; Editing by Brian Moss)

((michele.gershberg@reuters.com; +1 646 223 6185; Reuters Messaging: michele.gershberg.reuters.com@reuters.net)) Keywords: DISH PRICES/

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