SBC in talks with Echostar over resale deal
Thu Jul 21, 2005 02:30 PM ET
WASHINGTON, July 21 (Reuters) - SBC Communications Inc. (SBC.N: Quote, Profile, Research) said on Thursday it was in talks to modify its resale agreement with Echostar Corp.'s (DISH.O: Quote, Profile, Research) DISH satellite television service, after cutting back on sales in the second quarter.
SBC, the No. 2 U.S. telecommunications company, has resold DISH service since March last year as a quick way to compete against cable companies. But with plans to launch its own video service broadly next year, SBC has said it would target DISH sales only to areas not slated to get its home-grown video service.
In the second quarter, SBC said it sold 10,000 DISH subscriptions, down from 71,000 subscriptions in the first quarter and a peak of 105,000 in the third quarter of 2004.
SBC Chief Financial Officer Rick Lindner told analysts in a conference call on Thursday that SBC was in talks with Echostar on "how to evolve the relationship and the commercial terms of the relationship going forward," but said no agreements had been reached.
Lindner said SBC's marketing for DISH services would grow later this year when SBC begins selling HomeZone, an advanced television set-top device that combines satellite TV with SBC's high-speed Internet services.
UBS analyst Aryeh Bourkeff said in a research note that SBC's declining efforts may be triggering a push by Echostar, namely recent price cuts in six cities, four of which are in SBC's territory.